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Finance, Monetary Policy and Investment


  • George Argitis

    () (Department of Economics, University of Crete, Greece)


In this paper we attempt to develop some basic lines of a political economy perspective of the impact of finance and monetary policy on investment. We argue that the structure of capital, particularly the type of the relation between the industrial and the financial sector determines, to an extent, the way that finance affects investment. The domain in which this effect takes place is the distribution of income. Hence, this perspective integrates financial and real variables and argues that their interaction, which is institutionally and historically defined, acts as a main source of influence on investment and industrial accumulation in capitalism. Yet, we econometrically estimate some of our fundamental hypotheses, using data from the USA.

Suggested Citation

  • George Argitis, "undated". "Finance, Monetary Policy and Investment," Working Papers 0309, University of Crete, Department of Economics.
  • Handle: RePEc:crt:wpaper:0309

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    References listed on IDEAS

    1. Jeffrey I. Bernstein & Theofanis P. Mamuneas & Panos Pashardes, 2004. "Technical Efficiency and U.S. Manufacturing Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 402-412, February.
    2. Rungsuriyawiboon, Supawat & Stefanou, Spiro E., 2007. "Dynamic Efficiency Estimation: An Application to U.S. Electric Utilities," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 226-238, April.
    3. McLaren, Keith R & Cooper, Russel J, 1980. "Intertemporal Duality: Application to the Theory of the Firm," Econometrica, Econometric Society, vol. 48(7), pages 1755-1762, November.
    4. Timothy J. Considine, 2000. "Cost Structures for Fossil Fuel-Fired Electric Power Generation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 83-104.
    5. Kira R. Fabrizio & Nancy L. Rose & Catherine D. Wolfram, 2007. "Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on US Electric Generation Efficiency," American Economic Review, American Economic Association, vol. 97(4), pages 1250-1277, September.
    6. Markiewicz, K. & Rose, N.L. & Wolfram, C., 2004. "Does Competition Reduce Costs? Assessing the Impact of Regulatory Restructuring on U.S. Electric Generation Efficiency," Cambridge Working Papers in Economics 0472, Faculty of Economics, University of Cambridge.
    7. Paul W. Bauer, 1988. "Decomposing TFP growth in the presence of cost inefficiency, nonconstant returns to scale, and technological progress," Working Paper 8813, Federal Reserve Bank of Cleveland.
    8. Larry G. Epstein, 1981. "Duality Theory and Functional Forms for Dynamic Factor Demands," Review of Economic Studies, Oxford University Press, vol. 48(1), pages 81-95.
    9. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
    10. Epstein, Larry G & Denny, Michael G S, 1983. "The Multivariate Flexible Accelerator Model: Its Empirical Restrictions and an Application to U.S. Manufacturing," Econometrica, Econometric Society, vol. 51(3), pages 647-674, May.
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    More about this item


    Finance; Monetary Policy; Credit; Income Distribution; Investment;

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian

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