Abstract

STOCKHAMMER, Engelbert. Financialization, income distribution and the crisis. Inv. Econ [online]. 2012, vol.71, n.279, pp.39-70. ISSN 0185-1667.

The paper argues that process of financialization has profoundly changed how capitalist economics operate. The financial sector has grown relative to the real economy and become more fragile. Non-financial businesses have adopted shareholder value orientation, which had negative effects on investment. Working class households became squeezed because of rising inequality and have become more indebted, in particular in countries with real estate bubbles. Financial globalization has given rise to growing international imbalances, which have allowed two growth models to emerge: a debt-led consumption growth model and an export-led growth model. Both should be understood as reactions to the lack of effective demand due to the polarization of income distribution. The resulting finance-dominated accumulation regime is characterized by slow and fragile growth. The crisis is best understood as the outcome of the interaction of financialization and changes income distribution.

Keywords : financialization; financial globalization; economic crisis; effective demand; income distribution.