Macroeconomic implications of financialization
Peter Skott and
Soon Ryoo
UMASS Amherst Economics Working Papers from University of Massachusetts Amherst, Department of Economics
Abstract:
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
Keywords: financialization; stock-flow consistency; retention rate; ex- ternal finance; new issues. (search for similar items in EconPapers)
Date: 2007-06
New Economics Papers: this item is included in nep-mac and nep-pke
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Citations: View citations in EconPapers (36)
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Journal Article: Macroeconomic implications of financialisation (2008) 
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