A Minskyan critique of the financial constraint approach to financialization

Ilhan Dögüs
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Ilhan Dögüs: Research Associate, Department of Socioeconomics, University of Hamburg, Germany
Authors registered in the RePEc Author Service: Ilhan Dögüs

Review of Keynesian Economics, 2018, vol. 6, issue 2, 202-220

Abstract: In this paper, the post-Kaleckian approach to financialization, which argues that investment of non-financial corporations (NFCs) in real capital assets has been constrained by rising dividend and interest payments, will be criticized based on a Minskyan understanding of investment. It will be suggested that reinvestment of profits in capital assets has decreased because of a decline in quasi-rent expectations induced by depressed demand. The argument will be tested via Granger causality using available US data for the period between 1960 and 2014.

Keywords: financialization; financial constraint; Minsky; capital assets; financial assets (search for similar items in EconPapers)
JEL-codes: E12 E22 E44 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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