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Some Stylized Facts on the Finance-Dominated Accumulation Regime

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  • Engelbert Stockhammer

Abstract

While there is an agreement that the Fordist accumulation regime has come to an end in the course of the 1970s, there is no agreement on how to characterize the post-Fordist regime (or if a such is already in place). The paper seeks put together various arguments related to financialization (in the broad sense) from a macroeconomic point of view and investigate the relevance of these arguments by means of an analysis stylized facts for EU countries. The paper discusses changes in investment behaviour, consumption behaviour and government expenditures, investigating to what extent changes are related to financialization. Households experience higher debt levels. Rising profits of businesses come with only moderate investment. The notion of a “finance-dominated” accumulation regime is proposed to highlight that financial developments crucially shape the pattern and the pace of accumulation. The finance dominated accumulation regime is characterized by a mediocre growth performance and by higher volatility. However, so far deregulated financial markets have not lead to major financial crises in advanced capitalist economies. A possible reason for this is that the size of the state sector has not been substantially reduced despite neoliberal attempts to do so.

Suggested Citation

  • Engelbert Stockhammer, 2007. "Some Stylized Facts on the Finance-Dominated Accumulation Regime," Working Papers wp142, Political Economy Research Institute, University of Massachusetts at Amherst.
  • Handle: RePEc:uma:periwp:wp142
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    File URL: https://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_101-150/WP142.pdf
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    References listed on IDEAS

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    1. Case Karl E. & Quigley John M. & Shiller Robert J., 2005. "Comparing Wealth Effects: The Stock Market versus the Housing Market," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-34, May.
    2. James Crotty, 2007. "If Financial Market Competition is so Intense, Why are Financial Firm Profits so High? Reflections on the Current ‘Golden Age’ of Finance," Working Papers wp134, Political Economy Research Institute, University of Massachusetts at Amherst.
    3. Carruth, Alan & Dickerson, Andrew & Henley, Andrew, 2000. " What Do We Know about Investment under Uncertainty?," Journal of Economic Surveys, Wiley Blackwell, vol. 14(2), pages 119-153, April.
    4. Engelbert Stockhammer & Özlem Onaran & Stefan Ederer, 2009. "Functional income distribution and aggregate demand in the Euro area," Cambridge Journal of Economics, Oxford University Press, vol. 33(1), pages 139-159, January.
    5. Pascal Petit, 1999. "Structural Forms and Growth Regimes of the Post-Fordist Era," Review of Social Economy, Taylor & Francis Journals, vol. 57(2), pages 220-243.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Florin-Marius PAVELESCU, 2008. "Interdependencies Between Gross Capital Formation, Economic Growth And External Equilibrium In The Context Of The European Union Enlargement," Romanian Journal of Economics, Institute of National Economy, vol. 27(2(36)), pages 79-94, December.
    2. Eckhard Hein, 2010. "Shareholder Value Orientation, Distribution And Growth-Short- And Medium-Run Effects In A Kaleckian Model," Metroeconomica, Wiley Blackwell, vol. 61(2), pages 302-332, May.
    3. Georgios Argitis & Stella Michopoulou, 2011. "Are Full Employment and Social Cohesion Possible Under Financialization?," Forum for Social Economics, Springer;The Association for Social Economics, vol. 40(2), pages 139-155, July.
    4. Eckhard Hein & Till van Treeck, 2010. "‘Financialisation’ in Post-Keynesian Models of Distribution and Growth: A Systematic Review," Chapters,in: Handbook of Alternative Theories of Economic Growth, chapter 13 Edward Elgar Publishing.
    5. Till van Treeck, 2008. "The political economy debate on ‘financialisation’ – a macroeconomic perspective," IMK Working Paper 01-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    6. Eckhard Hein, 2009. "A (Post-) Keynesian perspective on "financialisation"," IMK Studies 01-2009, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    7. Hein, Eckhard, 2011. "Distribution, ‘Financialisation’ and the Financial and Economic Crisis – Implications for Post-crisis Economic Policies," MPRA Paper 31180, University Library of Munich, Germany.
    8. Eckhard Hein, 2012. ""Financialization," distribution, capital accumulation, and productivity growth in a post-Kaleckian model," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 34(3), pages 475-496.
    9. Araújo, Eliane & Bruno, Miguel & Pimentel, Débora, 2012. "Financialization against Industrialization: a regulationnist approach of the Brazilian Paradox," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 11.
    10. Florin-Marius PAVELESCU, 2008. "Gross Capital Formation And Economic Growth During Early 2000’S In Eu-Member And Candidates States," Romanian Journal of Economics, Institute of National Economy, vol. 26(1(35)), pages 166-179, June.
    11. Isil Tellalbasi, 2014. "Financialization Of Household Sector In Turkey., 2000-2013," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(12), pages 1826-1839, December.
    12. repec:mes:postke:v:35:y:2012:i:2:p:187-213 is not listed on IDEAS
    13. Thomas I. Palley, 2007. "Financialization: What It Is and Why It Matters," Economics Working Paper Archive wp_525, Levy Economics Institute.
    14. Eckhard Hein & Achim Truger, 2012. "Finance-dominated capitalism in crisis—the case for a global Keynesian New Deal," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 35(2), pages 187-213.

    More about this item

    Keywords

    financialization; finance-dominated accumulation regime; macroeconomics consumption; investment; financial system; financial stability;

    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E - Macroeconomics and Monetary Economics
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • P17 - Economic Systems - - Capitalist Systems - - - Performance and Prospects

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