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The political economy debate on ‘financialisation’ – a macroeconomic perspective

Till van Treeck

No 01-2008, IMK Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute

Abstract: A number of important contributions to the political economy literature have argued that changes in the financial sector have been amongst the main reflections, or even the driving forces, of recent transformations of capitalism in the rich countries. This hypothesis has been referred to as 'financialisation'. We argue in this article that the interdisciplinary literature could be enriched if the macroeconomic dimension of financialisation was more explicitly taken into account. In particular, important macroeconomic constraints regarding the determination of profits, in the face of a decreasing importance of physical investment and an increased importance of financial operations, are often not explicitly considered. We compare our macroeconomic approach with contributions from different strands in the existing literature, including empirical analyses of new patterns of profit generation, the 'varieties of capitalism' approach, the British 'social accounting' literature, and the French 'regulationist' literature. Our theoretical framework is illustrated by means of an empirical comparison of the effects of financialisation in the USA and in Germany.

Keywords: Financialisation; political economy; varieties of capitalism; social accounting; regulationism (search for similar items in EconPapers)
JEL-codes: P16 G10 G30 E21 (search for similar items in EconPapers)
Date: 2008
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