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On the expansion of finance and financialisation

Author

Listed:
  • Russo, Alberto
  • Zanini, Adelino

Abstract

In this paper we explore the role of finance in the recent crisis noting that its expansion, in a context of deregulation and globalisation, has boosted financial profits and capital accumulation, but at the cost of a growing systemic instability both in the leading capitalist economy, i.e. the USA, and at the international level. The expansion of finance tends to emerge in certain phases of capitalist development, in particular during periods of countries’ decline. At the same time, each phase has its peculiar aspects and, referring to the recent evolution, we focus on the phenomenon of financialisation, intended as an increasing involvement of economic agents in the working of financial markets.

Suggested Citation

  • Russo, Alberto & Zanini, Adelino, 2010. "On the expansion of finance and financialisation," MPRA Paper 26828, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:26828
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    File URL: https://mpra.ub.uni-muenchen.de/26828/1/MPRA_paper_26828.pdf
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    References listed on IDEAS

    as
    1. William Milberg & Deborah Winkler, 2010. "Financialisation and the dynamics of offshoring in the USA," Cambridge Journal of Economics, Oxford University Press, vol. 34(2), pages 275-293, March.
    2. Russo, Alberto, 2010. "Elementi di novità, meccanismi noti e cause di fondo della recente crisi
      [Elements of novelty, known mechanisms, and fundamental causes of the recent crisis]
      ," MPRA Paper 21648, University Library of Munich, Germany.
    3. Delli Gatti, Domenico & Gallegati, Mauro & Greenwald, Bruce & Russo, Alberto & Stiglitz, Joseph E., 2010. "The financial accelerator in an evolving credit network," Journal of Economic Dynamics and Control, Elsevier, vol. 34(9), pages 1627-1650, September.
    4. Engelbert Stockhammer, 2004. "Financialisation and the slowdown of accumulation," Cambridge Journal of Economics, Oxford University Press, vol. 28(5), pages 719-741, September.
    5. Bénédicte Vidaillet & V. D'Estaintot & P. Abécassis, 2005. "Introduction," Post-Print hal-00287137, HAL.
    6. Hyman P. Minsky, 1992. "The Financial Instability Hypothesis," Economics Working Paper Archive wp_74, Levy Economics Institute.
    7. 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.
    8. Merih Uctum & Sandra Viana, 1999. "Decline in the US profit rate: a sectoral analysis," Applied Economics, Taylor & Francis Journals, vol. 31(12), pages 1641-1652.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    deregulation; renationalisation; capitalist accumulation; instability; inequality;

    JEL classification:

    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • P17 - Economic Systems - - Capitalist Systems - - - Performance and Prospects
    • G01 - Financial Economics - - General - - - Financial Crises

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