369 research outputs found
The Rise of European Unemployment: A Synopsis
Full text linkUnemployment in the European Union has risen from a modest 2% in 1970 to 8.3% in 2002, a level not seen since the Great Depression. In this draft introduction for his new book, The Rise of European Unemployment: A Keynesian Approach, economist Engelbert Stockhammer argues that changes in the relationship between the financial sector and the real sector of the economy, a phenomenon he labels “financialization,” is at the root of the slowdown.
Financialization and the Global Economy
Full text linkIn this chapter from the forthcoming book, The Political Economy of Financial Crises, edited by Gerald Epstein and Martin H. Wolfson, (Oxford University Press, 2012) Engelbert Stockhammer�discusses ‘financialization’, i.e. changes in the role of the financial sector. This will highlight (1) changes in household behavior, in particular with regards to household debt, (2) changes in the behaviour of non-financial businesses, such as shareholder value orientation and increased financial activity and (3) changes in the financial sector, in particular the emergence of the (hardly regulated) shadow banking sector, a shift towards household credit (rather than business credit) and a shift to investment banking/fee generating business. Second, the chapter discusses the international dimension of financialization. Here the liberalization of capital flows and its consequences, the determination of exchange rates by capital flows (rather than by current account disequilibria), will be discussed. International financial liberalization has not fulfilled the neoliberal promise of generating investment-based growth, but rather has given rise to a series of financial crises that were typically driven by a swing of capital inflows (‘capital flow bonanza’) followed by capital flow reversals. Third, the chapter offers an interpretation of the finance-dominated accumulation regime as having given rise to two distinct growth models (based on Stockhammer 2010): a credit-financed consumption-driven growth model (mostly in Anglo-Saxon countries) and a export-driven growth model (in Germany, Japan, and, possibly, China). Both growth models suffer from a structural demand deficiency, which is due to wage suppression, but each try to overcome this by different means (credit-financed consumption or export orientation). The chapter thus highlights how financialization with its domestic and international effects have interacted with a polarization of income distribution to generate the structural imbalances that led to the crisis 2007-09.
Interview with Engelbert Stockhammer
No full textEngelbert Stockhammer obtained his PhD at the University of Massachusetts at Amherst in 2000. He joined Kingston in 2010. He is presently research associate at the Political Economy Research Institute at the University of Massachusetts at Amherst) and member of the coordination committee of the Research Network Macroeconomics and Macroeconomic Policy. His research areas include macroeconomics, applied econometrics, financial systems and heterodox economics. He has worked extensively on the de..
Peripheral Europe’s Debt and German Wages. The Role of Wage Policy in the Euro Area
Full text linkThe paper argues that the Greek debt crisis, as well as those of other Southern European countries and Ireland, has to be seen in macroeconomic context. The sum of the public sector balance, the (domestic) private sector balance and the current account deficit (or equivalently: the capital inflows) has to add up to zero. By implication in a country that has a current account deficit either the private sector or the public sector has to run a deficit. Therefore the peripheral countries can only solve their public debt problems if there is a change in German current account surpluses. The paper explores the implications of this for wage policy in the euro zone.
The REF’s singular focus on excellence limits academic diversity
No full textResearch assessment exercises, such as the REF ostensibly serve to evaluate research, but they also shape and manage it. Based on a study of REF submissions in the fields of economics, history, business and politics, Engelbert Stockhammer, argues that the REF promotes a narrow vision of economics determined largely by work published in particular journals and calls for a wider distribution of research funding to prevent fields being captured by dominant academic cultures
Testing fundamentalist–momentum trader financial cycles: An empirical analysis via the Kalman filter
Full text linkThis paper proposes an empirical test for Minskyan financial cycles in asset prices, driven by the interaction of fundamentalist and momentum traders. Both agents’ beliefs about the future are unobserved and can be modelled in a state space model. We use the Kalman filter to identify the two behavioral rules and evaluate whether the conditions for the existence of cycles hold. The model is estimated for equity and housing prices for France, Germany, the UK and the United States, for the period 1970–2017, with annual and quarterly data. We find robust empirical support for the existence of endogenous financial cycles in equity markets for all countries and for France, the UK and the United States for housing markets.</p
sj-pdf-1-pas-10.1177_00323292231201480 - Supplemental material for Bringing Household Finance Back In: House Prices and the Missing Macroeconomics of Comparative Political Economy
No full textSupplemental material, sj-pdf-1-pas-10.1177_00323292231201480 for Bringing Household Finance Back In: House Prices and the Missing Macroeconomics of Comparative Political Economy by James D. G. Wood and Engelbert Stockhammer in Politics & Society</p
A Modern Guide to Keynesian Macroeconomics and Economic Policies Eckhard Hein & Engelbert Stockhammer (Eds)
No full textEckhard Hein and Engelbert Stockhammer have recently edited this book, which intends to provide an overview of Keynesian and Post Keynesian macroeconomics and policies at an intermediate-to-advanced level. The book contains 13 chapters covering topics and issues typically dealt with by Post Keynesian economists
Some Stylized Facts on the Finance-Dominated Accumulation Regime
Full text linkWhile there is an agreement that the Fordist accumulation regime has come to an end in the course of the 1970s, there is no agreement on how to characterize the post-Fordist regime (or if a such is already in place). The paper seeks put together various arguments related to financialization (in the broad sense) from a macroeconomic point of view and investigate the relevance of these arguments by means of an analysis stylized facts for EU countries. The paper discusses changes in investment behaviour, consumption behaviour and government expenditures, investigating to what extent changes are related to financialization. Households experience higher debt levels. Rising profits of businesses come with only moderate investment. The notion of a “finance-dominated” accumulation regime is proposed to highlight that financial developments crucially shape the pattern and the pace of accumulation. The finance dominated accumulation regime is characterized by a mediocre growth performance and by higher volatility. However, so far deregulated financial markets have not lead to major financial crises in advanced capitalist economies. A possible reason for this is that the size of the state sector has not been substantially reduced despite neoliberal attempts to do so.financialization, finance-dominated accumulation regime, macroeconomics consumption, investment, financial system, financial stability
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The Rise of European Unemployment: A Synopsis
No full textWorking Paper 76This paper takes Keynesian macroeconomics and growth theory as its starting point and uses it to analyse the rise of unemployment in the large European economies. In a nutshell the explanation proposed in a series of papers2 is the following. Employment growth is determined by demand growth. The path of growth is set by investment decisions. Changes in labor market institutions are unable to explain the rise in unemployment. Econometric evidence on the relative explanatory power of labor market institutions and capital accumulation in explaining labor market variables are presented in Stockhammer (2004a). I conclude that capital accumulation determines the development on the labor market. Consequently the question of why capital accumulation has slowed down arises. It will be argued that changes in the relation between the financial sector and the real sector of the economy, a phenomenon to be labeled ‘financialization’ (Stockhammer 2004b) is at the root of this slowdown
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