Financialisation and the financial and economic crises: Theoretical framework and empirical analysis for 15 countries

Nina Dodig, Eckhard Hein and Daniel Detzer

Working papers from Financialisation, Economy, Society & Sustainable Development (FESSUD) Project

Abstract: This paper analyses the long-run effects of financialisation and of the recent financial and economic crises for 15 countries. In order to provide a theoretical framework, we first outline three types of regimes under the conditions of financialisation, namely a debt-led private demand boom, an export-led mercantilist, and a domestic demand-led regime. We then take a look at the sectoral financial balances of the main macroeconomic sectors and at the growth contributions of the demand aggregates for each of the 15 countries, focusing in particular on the trade cycle before the crises. This enables us to cluster these countries according to the typology of regimes and describe the development dynamics among various groups, which were complementary and often mutually reinforcing, in the years leading up to the crises. Subsequently, we focus on the period following the outbreak of the crises and, by considering transmission mechanisms and main obstacles to recovery, analyse how countries in each of these clusters were affected. Finally, we focus on the regime shifts which have taken place in the course of the crises and we discuss the implications of these recent developments for the world economy.

Keywords: finance-dominated capitalism; financialisation; financial and economic crises; trade cycle; financial balances; distribution of income; current account imbalances (search for similar items in EconPapers)
JEL-codes: D31 D33 E44 E63 E65 F40 F43 G01 H12 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2015-07-01
New Economics Papers: this item is included in nep-acc and nep-mac
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Citations: View citations in EconPapers (16)

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Related works:
Chapter: Financialisation and the financial and economic crises: theoretical framework and empirical analysis for 15 countries (2016)
Working Paper: Financialisation and the financial and economic crises: Theoretical framework and empirical analysis for 15 countries (2015)
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