Financialization and endogenous technological change: A post-Kaleckian perspective

Pintu Parui

Structural Change and Economic Dynamics, 2021, vol. 58, issue C, 221-244

Abstract: In post-Keynesian literature, Hein (2012b) was the first to incorporate financialization as an influential positive determinant of the rate of technological change. However, financialization is more like a two-edged sword which can affect technological change negatively as well. We capture both the positive as well as the negative effect of financialization on technological change which encapsulates the possibility of multiple equilibria. In analyzing the long run of the model, we endogenize the financialization parameter as well and get richer dynamics than Hein (2012b). We show that under certain circumstances, a higher speed of diffusion of technological innovation, more regulated financial markets, and higher intra-class competition among firms are desirable for stabilizing the economy. Finally, we provide some policy prescriptions for the same.

Keywords: Capital accumulation; Financialization; Kaleckian model; Limit cycle; Technological change (search for similar items in EconPapers)
JEL-codes: C62 E12 E32 E44 G01 O41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Financialization and Endogenous Technological Change: a Post-Kaleckian Perspective (2020)
Working Paper: Financialization and Endogenous Technological Change: a Post-Kaleckian Perspective (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:58:y:2021:i:c:p:221-244

DOI: 10.1016/j.strueco.2021.05.004

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