Economic and Political Studies Vol. 5 No. 1, 2017

Olivia Huang Announcement
Announcement Type
Online Digital Resources
Location
China
Subject Fields
East Asian History / Studies, Economic History / Studies, Political History / Studies

Dear Colleagues,

 

Volume 5 Number 1, 2017 of Economic and Political Studies (EPS) has become available online at www.tandfonline.com/reps. This issue is dedicated to the thematic discussion on Financialisation of the Economy. In the following articles, scholars draw on their expertise to examine this fundamental issue.

 

Economic and Political Studies

Vol. 5 No. 1, 2017

 The processes of financialisation and economic performance

Malcolm Sawyer

 

Abstract

The paper considers the relationships between financialisation and economic performance. Financialisation is a persistent feature of industrialised capitalism, the nature of which differs over time and space. The present era of financialisation (since circa 1980) has been a world-wide phenomenon proceeding from different starting points and developing at different speeds, and can be viewed through the lens of variegated financialisation. The major features of the present era of financialisation are outlined. The increased scale of the financial sector leads to the issue of the relationship between financialisation and economic performance, and whether the additional resources used in the financial sector have been socially beneficial. The paper is completed by some brief remarks on the possibilities of de-financialisation.

 

 

International financialisation, developing countries and the contradictions of privatised Keynesianism

Bruno Bonizzi

Abstract
This paper contributes to the understanding of the impact of international financialisation on developing countries. It is generally understood that developing economies are part of the global financialisation process, as exporters of goods to ‘debt-led’ economies and as recipient of foreign capital inflows. This paper argues that a key process connecting these two aspects has been ‘privatised Keynesianism’, the policy regime that sustained financialisation in advanced economies by promoting low interest rates and asset appreciation. A consequence of this regime is to induce pressure on global financial institutions to look for returns and profits in the developing world. Such a mechanism represents a fundamental connection between the developing countries and financialisation at the global level, beside the spread of financial liberalisation. In the post-crisis environment, this connection remains strong and has become even more dangerous for developing countries.

 

The monetary root of financialisation

Yu Luo

 

Abstract

Marxism has a strong influence on Western left-wing economists’ understanding of financialisation, in that they regard financialisation as the consequence of the transformation of capitalism. Neoclassical economics and finance scholars tend to think of financialisation (financial development) as not exclusively occurring within the economic system of capitalism but as existing throughout an entire human history filled with numerous financial innovations. The unprecedented change of the monetary system ascribed to the collapse of the Bretton Woods System, among all historical and systemic changes, is the strongest underlying impetus to financialisation. Financialisation is the unintended consequence of a change in the monetary system from commodity money to credit money. Taking a more in-depth point of view, financialisation is philosophically a means for human beings to cope with the advent of a risk society, reflecting the advance of instrumental rationality, and hence is the embodiment of late modernity.

 

 

Financialisation in emerging economies: a systematic overview and comparison with Anglo-Saxon economies

Ewa Karwowski & Engelbert Stockhammer

 

Abstract

Financialisation research has originally focussed on the US experience, but the concept is now increasingly applied to emerging economies (EMEs). There is a rich literature stressing peculiarities of individual country experiences, but little systematic comparison across EMEs. This paper fills this gap, providing an overview of the debate and identifying six financialisation interpretations for EMEs. These different interpretations stress (1) financial deregulation, (2) foreign financial inflows, (3) asset price volatility, (4) the shift from bank-based to market-based finance, (5) business debt, and (6) household indebtedness. We construct and compare measures of the six financialisation interpretations across a sample of 17 EMEs from Latin America, emerging Europe, Africa and Asia, contrasting them with the US and UK, two financialised economies. We find considerable variation in financialisation experiences of EMEs. Asset price volatility is found across the continents. Asia has been more exposed to capital inflows, stock markets have gained importance and private sector debt has risen. In emerging Europe financial deregulation has been more pronounced with lower levels but strong increases in household debt. The picture is similar in South Africa, the African EME in the sample, where household debt is comparatively high. Financialisation in Latin America is weaker according to our measures.

 

Financialisation of goods in China

Zehao Liu

Abstract

This paper analyses price fluctuations of common goods in China. There are two types of fluctuation patterns in the underlying prices: the pattern of persistent and modest rises and the pattern of abrupt rises followed by dramatic falls. The analysis reveals that these two fluctuation patterns are related to a growing phenomenon of goods financialisation in China. This paper uses time series data to show that goods financialisation in China is indeed under its way to various levels, which renders different dynamic effects on consumer price inflation. The findings also have implications for making macroeconomic policies.

 

Wealth concentration among residents under the economic financialisation in China

Yang Ge & Ting Wang

Abstract

Income distribution has always been a public concern. However, there is little research that seeks to explore the relationship between economic financialisation and wealth concentration. Thomas Piketty, the author of Capital in the Twenty-first Century, reviews the history of wealth distribution since the Industrial Revolution and attempts to probe into the law between capital development and wealth distribution inequality with bulk data. Enlightened by Piketty’s research, this article looks into the ways in which capitalisation affects wealth distribution under the rapid development of economic financialisation in contemporary China. In doing so, it applies econometric methods with a rigorous analysis.

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