Financialisation, financial structures, economic performance and employment

The first major theme is the trends in the processes of financialisation reviewing quantitative and qualitative features of those trends, covering both industrialised and emerging economies. The ways in which the processes of financialisation impact on and interacts with the real sector are discussed with particular reference to the empirical evidence. In this, the financial development—economic growth relations are explored, and whether positive relationship between the two has declined and perhaps reversed in recent decades. There are other ways through which financialisation (particularly in the guise of ownership by the financial sector of the corporate sector and the pursuit of shareholder value) sets the framework for a wide range of decisions taken by corporations including investment and employment. In section 4 the focus is on the ways in which the financial sector could be changed and developed which could be more conducive to supporting sustainable development and high levels of employment and human development. The thrust of the argument is the need to develop diverse financial institutions with a variety of ownership forms whose primary functions are the savings—investment linkages, and to enable funds to flow in a more socially beneficial manner not solely governed by profit calculations of the financial sector.