Europe and Latin America’s social and economic stagnation is a direct result of the unresolved phenomena of the financialization crisis that broke out in 2008 in developed countries. Editors Noemi Levy and Etelberto Ortiz analyze the limitations of economic growth and development under capitalist economic organizations where financial capital is dominant, as well as explore alternative economic policies.
Financialization is one of the most innovative concepts to emerge in the field of political economy during the last three decades, although there is no agreement on what exactly it is. Profiting Without Producing puts forth a distinctive view defining financialization in terms of the fundamental conduct of non-financial enterprises, banks and households. Its most prominent feature is the rise of financial profit, in part extracted from households through financial expropriation. Financialized capitalism is also prone to crises, none greater than the gigantic turmoil that began in 2007. Using abundant empirical data, the book establishes the causes of the crisis and discusses the options broadly available for controlling finance.
This study provides a candid, systematic, and critical review of recent evidence on this complex subject. Based on a review of the literature and some new empirical evidence, it finds that (1) in spite of an apparently strong theoretical presumption, it is difficult to detect a strong and robust causal relationship between financial integration and economic growth; (2) contrary to theoretical predictions, financial integration appears to be associated with increases in consumption volatility (both in absolute terms and relative to income volatility) in many developing countries; and (3) there appear to be threshold effects in both of these relationships, which may be related to absorptive capacity. Some recent evidence suggests that sound macroeconomic frameworks and, in particular, good governance are both quantitatively and qualitatively important in affecting developing countries’ experiences with financial globalization.
This book is an extension of the author's last book (Crisis and Sustainability: The Delusion of Free Markets, Palgrave Macmillan, 2017) and sheds light on the evolution of the financial system after the 2007/08 crisis and on changes and developments in the regulatory framework that have taken place concurrently over the last ten years. The book’s central theme addresses the neoliberal philosophy of financial regulation and, in particular, the role of self-regulating markets in the finance sector and how this has affected incentives and behaviour within the finance sector. The author contends that neoliberal maxims have led us to believe that market-based finance is superior to, and safer than, a more rules-based regulatory regime for the sector, and then explains that experience suggests otherwise. The huge expansion of ‘financialization’ in the developed economies over the last two decades has greatly magnified the risks emanating from the impact of highly leveraged, risk averse, under-regulated finance on other sectors of these economies. The author concludes that financial institutions need to be encouraged to operate within a more socially responsible matrix that facilitates and promotes long-term economic growth coupled with social stability.
In the wake of the financial crisis, new regulatory measures were introduced which, along with changes in monetary and macroeconomic policy, have transformed the global financial structure. However, this new financial structure displays various fragilities. A new shadow banking system has grown both inside and outside the traditional banks and the divergence between core and periphery countries’ banks has increased further due to both the new regulations and the European Central Bank’s very peculiar interventions. Following Minsky’s approach, this volume explores the interplay between monetary policy, regulation and institutions in the aftermath of the great financial crisis. Minsky’s insights are used to interpret the recent regulatory changes and consider how they have affected the evolution of banks and financial markets. The unfortunate conclusion is that the changes in financial regulation introduced in various jurisdictions and inspired by the work of the Basel Committee, have not succeeded in thwarting the instability of the economic system. Instead, the mix of policies implemented so far has brought about increased fragility in the financial system. Minksy’s work on financial stability offers alternative solutions which policy-makers need to consider to resolve these issues. Financial Regulation in the European Union After the Crisis is an important volume for those who study political economy, banking and monetary economics.
The most common mode of analysis in economic theory is to assume equilibrium. Yet, without a proper theory of how economies behave in disequilibrium, there is no foundation for such a practice. The necessary step in proposing a foundation is the formulation of a theory of stability, and in this 1984 book, Professor Fisher is primarily concerned with this subject, although disequilibrium behavior itself is analyzed. The author first undertakes a review of the existing literature on the stability of general equilibrium. He then proposes a more satisfactory general model in which agents realize their state of disequilibrium and act on arbitrage opportunities. The interrelated topics of the role of money, the nature of quantity constraints, and the optimal behaviour of arbitraging agents are extensively treated.
This book brings together some leading and emerging scholars who bring an alternative view on some of the most pressing issues of today. In addition to key concepts in post-Keynesian and heterodox economics, the authors also explore financialization, debt, income distribution, and policies, and the emerging threat of dualism. Policy makers and scholars alike will find the book a much need addition to the field.
This Handbook provides an accessible critical review of the complex issues surrounding development and social change today. With chapters from recognized experts, examining economic, political and social aspects, and covering key topics and developing regions, it goes beyond current theory and sets out the debates which will shape an approach better suited to the modern world.
Financial capital continues to dominate Western economic organisations, despite major financial and economic crises. While these have not affected Latin American countries in the same way, other economic problems emerged after the reversion of loose monetary policies that debilitated the export-led growth model. This book discusses the issue of the financialised globalisation model in Latin America, looking at the region’s relationship with the international market. This edited collection is divided into three main sections. The first section discusses regional trends highlighting issues of trade and payments in financialised economies, the impact on deindustrialisation, its effect on inequality, external capital movements and monetary policies. The second section analyses the failure of comparative advantages of the export-led model in Colombia, Argentina and Mexico. Finally, the last section deals with the growth of financial balance sheets in small and developing economies such as Chile; how growth, investment and big corporation evolution were affected in Brazil and Mexico; and the effects of foreign exchange activity in Mexico. Through these discussions, this book aims to deepen the understanding of the crisis of financialisation and the export-led model, raising the question of whether it is possible for this model to continue or if it requires major readjustments to unfold economic growth. This book provides a distinctive analysis of the financialisation mechanisms in developing countries in order to emphasise affinities and differences between the countries of the region in productive and financial terms. It will be of great interest to economic and social science scholars and students, to journalists specialising on economic and development issues, and, more importantly, to policy makers.
