Financialization, premature deindustrialization, and instability in Latin America*

Esteban Pérez Caldentey and Matías Vernengo
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Esteban Pérez Caldentey: Economic Development Division, Economic Commission for Latin America and the Caribbean, Santiago, Chile
Matías Vernengo: Bucknell University, Lewisburg, PA, USA

Review of Keynesian Economics, 2021, vol. 9, issue 4, 493–511

Abstract: The paper analyses the relation between premature deindustrialization in Latin America and what is termed premature financialization. Premature financialization is defined as a turn to finance, organized as an industrial concern, which is a vehicle for accumulation before the process of industrialization has reached maturity. This contrasts with developed countries where financialization occurs after an advanced stage of economic and social development has been reached, and where the growth of the financial sector, beyond a certain threshold, can be detrimental to economic activity. The paper examines the consequences of premature financialization for investment, growth, and financial stability.

Keywords: deindustrialization; financialization; financial fragility; Latin America (search for similar items in EconPapers)
JEL-codes: E44 G21 G23 O54 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (8)

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