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Economic Dynamics of Financial Capitalism: Labour Market Reforms, Welfare State Reduction, and the Impact of Technological Changes

Author

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  • Luigi Salvati

    (Università Telematica Pegaso)

  • Pasquale Tridico

    (Roma Tre University)

Abstract

This article delves into the economic landscape of advanced countries in our current era, delineating the defining features and policies that shape it. Beginning with an examination of financial capitalism, we explore its close relationship with labour market reforms aimed at diminishing job security, weakening unions, and reducing workers' bargaining power. Moreover, we highlight the concurrent reduction of the welfare state's role, which, unless mitigated by addressing demand crises, poses challenges in financing workers' consumption. The intertwining dynamics of technological advancements are also scrutinised, with a focus on the associated risks and opportunities. Finally, we draw policy implications from these analyses, offering insights into navigating the complex economic terrain of the present era.

Suggested Citation

  • Luigi Salvati & Pasquale Tridico, 2025. "Economic Dynamics of Financial Capitalism: Labour Market Reforms, Welfare State Reduction, and the Impact of Technological Changes," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 68(2), pages 349-366, June.
    • Handle: RePEc:spr:ijlaec:v:68:y:2025:i:2:d:10.1007_s41027-024-00524-2
    DOI: 10.1007/s41027-024-00524-2
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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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