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Have we been here before? Phases of financialization within the twentieth century in the US

Author

Listed:
  • Apostolos Fasianos

    (Council of Economic Advisors, Greek Ministry of Finance, Athens, Greece and University of Limerick, Ireland)

  • Diego Guevara

    (School of Economics, National University of Colombia, Bogotá, Colombia)

  • Christos Pierros

    (Department of Economics, University of Athens, Greece)

Abstract

This paper explores the process of financialization from a historical perspective during the course of the twentieth century. We identify four phases of financialization: the first from the 1900s to 1933 (early financialization), the second from 1933 to 1940 (transitory phase), the third between 1945 and 1973 (de-financialization), and the fourth period picks up from the early 1970s and leads to the Great Recession (complex financialization). Our findings indicate that the main features of the current phase of financialization were already in place in the first period. We closely examine institutions within these distinct financial regimes and focus on the relative size of the financial sector, the respective regulation regime of each period, the intensity of the shareholder value orientation, as well as the level of financial innovations implemented. Although financialization is a recent term, the process is far from novel. We conclude that its effects can be studied better with reference to economic history.

Suggested Citation

  • Apostolos Fasianos & Diego Guevara & Christos Pierros, 2018. "Have we been here before? Phases of financialization within the twentieth century in the US," Review of Keynesian Economics, Edward Elgar Publishing, vol. 6(1), pages 34-61, January.
    • Handle: RePEc:elg:rokejn:v:6:y:2018:i:1:p34-61
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    Citations

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    Cited by:

    1. Stefano Di Bucchianico, 2020. "A note on financialization from a Classical-Keynesian standpoint," Department of Economics University of Siena 824, Department of Economics, University of Siena.
    2. Joel Rabinovich & Niall Reddy, 2024. "Corporate Financialization: A Conceptual Clarification and Critical Review of the Literature," Working Papers PKWP2402, Post Keynesian Economics Society (PKES).
    3. Olivér Kovács, 2022. "Zombification and Industry 4.0—Directional Financialisation against Doomed Industrial Revolution," Social Sciences, MDPI, vol. 11(5), pages 1-24, May.
    4. Tsaliki, Persefoni & Tsoulfidis, Lefteris, 2021. "Financialization Historically Contemplated," MPRA Paper 113634, University Library of Munich, Germany, revised 30 May 2022.
    5. Reddy, Niall, 2024. "“Downsize And Distribute” Or “Merge And Monopolize”? A Critique Of Corporate Financialization Theories," SocArXiv 2zy5h, Center for Open Science.
    6. Adams, Zeno & Collot, Solène & Kartsakli, Maria, 2020. "Have commodities become a financial asset? Evidence from ten years of Financialization," Energy Economics, Elsevier, vol. 89(C).
    7. Di Bucchianico, Stefano, 2019. "The Impact of Financialization on the Rate of Profit: A Discussion," Centro Sraffa Working Papers CSWP36, Centro di Ricerche e Documentazione "Piero Sraffa".
    8. Niall Reddy & Joel Rabinovich, 2022. "Debunking the short-termist thesis in financialization studies: Evidence from US non-financial corporations 1998 – 2018," Working Papers PKWP2227, Post Keynesian Economics Society (PKES).

    More about this item

    Keywords

    financialization; monetary regimes; speculation;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;

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