Have We Been Here Before? Phases of Financialization within the 20th Century in the United States

Apostolos Fasianos, Diego Guevara and Christos Pierros

Economics Working Paper Archive from Levy Economics Institute

Abstract: This paper explores from a historical perspective the process of financialization over the course of the 20th century. We identify four phases of financialization: the first, from the 1900s to 1933 (early financialization); the second, from 1933 to 1940 (transitory phase); the third, between 1945 and 1973 (definancialization); and the fourth period begins in the early 1970s and leads to the Great Recession (complex financialization). Our findings indicate that the main features of the current phase of financialization were already in place in the first period. We closely examine institutions within these distinct financial regimes and focus on the relative size of the financial sector, the respective regulation regime of each period, and the intensity of the shareholder value orientation, as well as the level of financial innovations implemented. Although financialization is a recent term, the process is far from novel. We conclude that its effects can be studied better with reference to economic history.

Keywords: Financialization; Monetary Regimes; Speculation (search for similar items in EconPapers)
JEL-codes: B52 E42 E44 (search for similar items in EconPapers)
Date: 2016-06
New Economics Papers: this item is included in nep-his, nep-mac and nep-pke
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Citations: View citations in EconPapers (2)

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