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A note on financialization from a Classical-Keynesian standpoint

Stefano Di Bucchianico ()

Department of Economics University of Siena from Department of Economics, University of Siena

Abstract: In this paper we present a Classical-Keynesian viewpoint on financialization by using Garegnani’s ‘integrated wage-commodity sector’ method. We focus on three aspects. First, we argue that financial instruments such as derivatives have played the role of ‘luxury’ goods, unnecessary and/or detrimental to the direct and indirect production of the wage-basket. Second, we show that the accumulation of household debt can result in a higher normal rate of profit. Third, there is scope to reconsider the connection between financialization and labour market institutions, which makes labour bargaining strength wane. Labour market relationships need not be strictly tied to financialization.

Keywords: financialization; household debt; labour market; rate of profit; financial markets (search for similar items in EconPapers)
JEL-codes: B51 E44 F65 G5 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-gen, nep-hme, nep-mac and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:usi:wpaper:824

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