Macroeconomic implications of financialisation
A growing literature suggests that 'financialisation' may weaken the performance of non-financial corporations and constrain the growth of aggregate demand. This paper uses two alternative approaches--one derived from Skott and one from Lavoie and Godley--and two different settings--a labour-constrained setting and a dual-economy setting--to evaluate some of the claims that have been made. Our analysis, which pays explicit attention to financial stock--flow relations, suggests that the qualitative effects of 'financialisation' are insensitive to the precise specification of household saving behaviour but depend critically on the labour market assumptions (labour-constrained versus dual) and the specification of the investment function (Harrodian versus Kaleckian). Copyright The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.
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Volume (Year): 32 (2008)
Issue (Month): 6 (November)
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- Skott, Peter, 2005. "Fairness as a source of hysteresis in employment and relative wages," Journal of Economic Behavior & Organization, Elsevier, vol. 57(3), pages 305-331, July.
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- Peter Skott, 2004. "Fairness as a source of hysteresis in employment and relative wages," UMASS Amherst Economics Working Papers 2004-04, University of Massachusetts Amherst, Department of Economics.
- Dutt, Amitava Krishna, 1984. "Stagnation, Income Distribution and Monopoly Power," Cambridge Journal of Economics, Oxford University Press, vol. 8(1), pages 25-40, March.
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- James Crotty, 2005. "The Neoliberal Paradox: The Impact of Destructive Product Market Competition and Impatient Finance on Nonfinancial Corporations in the Neoliberal Era," Research Briefs rb2003-5, Political Economy Research Institute, University of Massachusetts at Amherst.
- Skott, Peter, 1981. "On the 'Kaldorian' Saving Function," Kyklos, Wiley Blackwell, vol. 34(4), pages 563-581.
- Skott, Peter, 1989. "Effective Demand, Class Struggle and Cyclical Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(1), pages 231-247, February. Full references (including those not matched with items on IDEAS)
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