IDEAS home Printed from https://ideas.repec.org/a/taf/rripxx/v29y2022i4p1314-1341.html

Growing differently? Financial cycles, austerity, and competitiveness in growth models since the Global Financial Crisis

Author

Listed:
  • Karsten Kohler
  • Engelbert Stockhammer

Abstract

The paper contributes to the recent growth models debate through a cross-country analysis of growth drivers before and after the 2008 Global Financial Crisis (GFC). It argues that the widely used dichotomy of export-led versus (debt-financed) consumption-led growth has lost its usefulness since the GFC. Specifically, identifying growth models through growth contributions can give misleading results when the drivers of economic growth change. The paper contends that Comparative Political Economy (CPE) has neglected the unstable nature of financial growth drivers, effectively ignores fiscal policy, and overemphasizes price competitiveness as a growth driver. It shows empirically that, first, debt-financed growth is cyclical and financial booms come with busts and debt overhang; second, post-GFC growth dynamics are strongly shaped by the fiscal policy reaction; third, price competitiveness through wage deflation has played a negligible role in driving growth. We conclude that CPE needs to broaden its analysis of growth drivers in order to understand how the GFC transformed growth models.

Suggested Citation

  • Karsten Kohler & Engelbert Stockhammer, 2022. "Growing differently? Financial cycles, austerity, and competitiveness in growth models since the Global Financial Crisis," Review of International Political Economy, Taylor & Francis Journals, vol. 29(4), pages 1314-1341, July.
    • Handle: RePEc:taf:rripxx:v:29:y:2022:i:4:p:1314-1341
    DOI: 10.1080/09692290.2021.1899035
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09692290.2021.1899035
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09692290.2021.1899035?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gabriel Porcile & Gilberto Tadeu Lima, 2023. "Rentiers, Strategic Public Goods, and Financialization in the Periphery," Economics Working Paper Archive wp_1017, Levy Economics Institute.
    2. Karsten Kohler & Benjamin Tippet & Engelbert Stockhammer, 2023. "House price cycles, housing systems, and growth models," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 20(3), pages 461-490, December.
    3. Hein, Eckhard & van Treeck, Till, 2024. "Financialisation and demand and growth regimes: A review of post-Keynesian contributions," ifso working paper series 32, University of Duisburg-Essen, Institute for Socioeconomics (ifso).
    4. Juan Manuel Campana & Eckhard Hein, 2025. "Eurozone governance and the German demand and growth regimes, 1999–2024," Review of Evolutionary Political Economy, Springer, vol. 6(3), pages 515-545, December.
    5. Sascha Keil & Walter Paternesi Meloni, 2024. "Kaldorian cumulative causation in the Euro area: an empirical assessment of divergent export competitiveness," Chemnitz Economic Papers 063, Department of Economics, Chemnitz University of Technology.
    6. Schedelik, Michael & Nölke, Andreas & May, Christian & Gomes, Alexandre, 2022. "Dependency revisited: Commodities, commodity-related capital flows and growth models in emerging economies," IPE Working Papers 201/2022, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    7. Hein, Eckhard, 2022. "Financialisation, varieties of macroeconomic regimes and stagnation tendencies in a stylised Kaleckian model," IPE Working Papers 193/2022, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    8. Engelbert Stockhammer, 2023. "Macroeconomic ingredients for a growth model analysis for peripheral economies: a post-Keynesian-structuralist approach," New Political Economy, Taylor & Francis Journals, vol. 28(4), pages 628-645, July.
    9. Campana, Juan Manuel & Emboava Vaz, João & Hein, Eckhard & Jungmann, Benjamin, 2022. "Demand and growth regimes of the BRICs countries," IPE Working Papers 197/2022, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    10. Jungmann, Benjamin, 2021. "Growth drivers in emerging capitalist economies before and after the Global Financial Crisis," IPE Working Papers 172/2021, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    11. Eckhard Hein & Moritz Marpe & Karolina Schütt, 2025. "Wealth distribution with and without real estate assets and mortgage debt in ten European countries – a post-Kaleckian approach," Working Papers PKWP2506, Post Keynesian Economics Society (PKES).
    12. Jesus Felipe & José A. Pérez-Montiel & Oguzhan Ozcelebi, 2025. "Do Changes in the Real Exchange Rate Affect the Trade Balance? Evidence from European Countries," Open Economies Review, Springer, vol. 36(5), pages 1499-1525, November.
    13. Engelbert Stockhammer & Quirin Dammerer & Andreas Maschke, 2025. "Between Academia and Economic Policy: The Rise and Decline of Post-Keynesian Economics in Austria," Review of Political Economy, Taylor & Francis Journals, vol. 37(4), pages 1331-1357, August.
    14. Engelbert Stockhammer & Andre Novas Otero, 2023. "A tale of housing cycles and fiscal policy, not competitiveness. Growth drivers in Southern Europe," New Political Economy, Taylor & Francis Journals, vol. 28(3), pages 483-505, May.
    15. Walter Paternesi Meloni, 2021. "The price vs. non-price competitiveness conundrum: a post-Keynesian comparative political economy analysis," Working Papers PKWP2109, Post Keynesian Economics Society (PKES).
    16. Andrea Barigazzi & Claudia Zola, 2025. "Postsecondary Education Attendance and the Business Cycle in Europe. Is the Future of Young Adults Related to the Welfare Regime?," Research in Higher Education, Springer;Association for Institutional Research, vol. 66(7), pages 1-38, November.
    17. Botta, Alberto & Porcile, Gabriel & Spinola, Danilo & Yajima, Giuliano Toshiro, 2023. "Financial integration, productive development and fiscal policy space in developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 175-188.
    18. Miguel Angel Casau & Daniel Herrero, 2024. "Deindustrialization paths and growth models: Germany and Spain in comparative perspective," LEM Papers Series 2024/06, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    19. Rial, Adrián & Herrero, Daniel & Paternesi Meloni, Walter, 2025. "Navigating competitiveness in Mediterranean countries: drivers of manufacturing exports by technological intensity," International Economics, Elsevier, vol. 183(C).
    20. Benjamin Jungmann, 2023. "Growth drivers in emerging capitalist economies: building blocks for a post-Keynesian analysis and an empirical exploration of the years before and after the Global Financial Crisis," Review of Evolutionary Political Economy, Springer, vol. 4(2), pages 349-386, July.
    21. Feliciano, Daniel & Ferreiro, Jesus & Rodriguez-Fuentes, Carlos J., 2025. "Growth regimes, growth drivers and private demand in financialised economies: The case of Spain," Structural Change and Economic Dynamics, Elsevier, vol. 74(C), pages 878-894.
    22. Ramona Tiganasu & Gabriela Carmen Pascariu & Dan Lupu, 2022. "Competitiveness, fiscal policy and corruption: evidence from Central and Eastern European countries," Oeconomia Copernicana, Institute of Economic Research, vol. 13(3), pages 667-698, September.

    More about this item

    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rripxx:v:29:y:2022:i:4:p:1314-1341. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rrip20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.