The Macroeconomics of Financialization: A Stages of Development Approach

Thomas Palley

EKONOMIAZ. Revista vasca de Economía, 2009, vol. 72, issue 03, 34-53

Abstract: This paper explores the concept of financialization using a «stages of development» approach. The paper develops a stylized history of financialization and tracks its evolution through different stages since the end of World War II. The paper tracks this history using a simple Kaleckian macroeconomic framework, focusing on how changes in remuneration patterns, financial engineering by firms, asset market valuations, and borrowing behavior by firms and consumers affect macroeconomic outcomes. The fact that financialization is long-running and expansionary in its early and middle stages, made it extremely hard to oppose. That is because both the policy and political process have a bias against implementing change in good times. The political cost of change is immediate and direct, yet the benefit is averting a hypothetical future problem.

Keywords: financialization; debt; income distribution; growth (search for similar items in EconPapers)
JEL-codes: E10 E12 E42 (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.ogasun.ejgv.euskadi.net/r51-k86aekon/es ... ubl=67&registro=1000 complete text (application/pdf)

Related works:
Chapter: The Macroeconomics of Financialization: Stages of Development Approach (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ekz:ekonoz:2009305

Ordering information: This journal article can be ordered from
Dpto. de Hacienda y Finanzas, Gobierno Vasco, C/Donostia-San Sebastián, 1, 01010 Vitoria-Gasteiz, Spain

Access Statistics for this article

More articles in EKONOMIAZ. Revista vasca de Economía from Gobierno Vasco / Eusko Jaurlaritza / Basque Government Contact information at EDIRC.
Bibliographic data for series maintained by Iñaki Treviño ().