1,721,168 research outputs found
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.
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
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.
Rezensionen / Book Reviews
No full textRezension von: Gethmann, Carl Friedrich et al. (2004): Gesundheit nach Maß? Eine transdisziplinäre Studie zu den Grundlagen eines dauerhaften Gesundheitssystems. Forschungsberichte der Interdisziplinären Arbeitsgruppen der Berlin-Brandenburgischen Akademie der Wissenschaften: Band 13, Berlin Howell, David R. (ed.) (2005): Fighting Unemployment. The Limits of Free Market Orthodoxy, Oxford Galbraith, John Kenneth (2004): The Economics of Innocent Fraud, New York Stockhammer, Engelbert (2004): The Rise of Unemployment in Europe. A Keynesian Approach, Northampton Heintze, Cornelia (2005): Wohlfahrtsstaat als Standortvorteil. Deutschlands Reformirrweg im Lichte des skandinavischen Erfolgsmodells, Leipzi
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.
Is aggregate demand wage-led or profit-led? A global model
No full textThere has been a significant decline in the wage share in both the developed and developing world which has coincided with the introduction of neoliberal policy reforms since the 1980s. The promise of these reforms was to stimulate private investment and exports, which was expected in turn to generate higher growth, more jobs and trickledown effects. The reasons for this fall have recently been the subject of a growing amount of literature that has tried to pin down the effects of technology, globalization, and changes in labour market institutions (see, inter alia, IMF, 2007; OECD, 2007; EC, 2007; ILO/IILS, 2011; Rodrik, 1997; Diwan, 2001; Harrison, 2002; Onaran, 2009; Rodriguez and Jayadev, 2010; Stockhammer, 2011). This chapter offers a theoretical and empirical assessment of the effects of this pro-capital redistribution of income on growth at both national and global levels
The finance-dominated accumulation regime, income distribution and the present crisis
Full text linkThe paper discusses the interactions of changes in income distribution and the accumulation dynamics in the post-Fordist accumulation regime in OECD countries, which is characterized by deregulated financial markets. The neoliberal mode of regulation came with a decisive shift in power relations at the expense of labor, which is clearly reflected in the fall of wage shares across OECD economies. The notion of a "finance-dominated" accumulation regime is proposed to highlight that financial developments crucially shape the pattern and the pace of accumulation. Financial globalization has relaxed balance of payment constraints and thereby allowed the build up of big international imbalances. The combination of real wage moderation and financial liberalization has led to different strategies (or at least outcomes) in different countries. While some countries (like the USA) exhibit a credit-fuelled consumption-driven growth model that comes with large current account deficits, others (like Germany and Japan) show an export-driven growth model with modest consumption growth and large current account surpluses. Overall the finance-dominated accumulation regime is characterized by a mediocre growth performance and by a high degree of fragility. (author´s abstract)Series: Department of Economics Working Paper Serie
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