Macroeconomic implications of financialization
A growing literature suggests that 'financialization' may weaken the performance of non-financial corporations and constrain the growth of ag- gregate demand. This paper evaluates (some of) the claims that have been made using two alternative approaches (one derived from Skott (1981, 1988, 1989) and one from Lavoie and Godley (2001-2002)) and two differ- ent settings (a labor-constrained setting and a dual-economy setting). All models pay explicit attention to financial stock-flow relations. The results are insensitive to the precise specification of household saving behavior but depend critically on the labor market assumptions (labor-constrained vs dual) and the specification of the investment function (Harrodian vs stagnationist). JEL Categories: E12, E21, E44
|Date of creation:||Jun 2007|
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- Lavoie, Marc, 1995.
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- Engelbert Stockhammer, 2004.
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Wiley Blackwell, vol. 57(3), pages 303-338, 07.
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- 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.
- Gene M. Grossman (ed.), 0. "Economic Growth," Books, Edward Elgar Publishing, volume 0, number 553.
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