Financialization and Demand Regimes in Advanced Economies

Authored by: Engelbert Stockhammer , Karsten Kohler

The Routledge International Handbook of Financialization

Print publication date:  February  2020
Online publication date:  February  2020

Print ISBN: 9781138308213
eBook ISBN: 9781315142876
Adobe ISBN:

10.4324/9781315142876-13

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Abstract

Post-Keynesian economics (PKE) has long been concerned with the macroeconomic outcomes of financialization. On a theoretical level, there has been a debate under what conditions financialization can have expansionary effects on aggregate demand (Boyer 2000; Dutt 2006; Skott and Ryoo 2008). Empirical research on financialization has demonstrated negative effects on firm investment (Orhangazi 2008; Tori and Onaran 2018) and functional income distribution (Dünhaupt 2016; Kohler et al. 2019), but expansionary effects of household debt on consumption and of property prices on investment (Kim et al. 2015; Stockhammer and Wildauer 2016). Post-Keynesians have also developed a typology of macroeconomic regimes allowing for cross-country comparative analysis. They distinguish wage-led and profit-led (Bhaduri and Marglin 1990; Lavoie and Stockhammer 2013), as well as export-driven and debt-driven demand regimes (Hein 2013; Stockhammer 2016).

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