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Inequality, emulation and debt: The occurrence of different growth regimes in the age of financialization in a stock-flow consistent model

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  • Daniel Detzer

Abstract

In the era of financialization, increasing income inequality could be observed in most developed and many developing countries. Despite similar developments in inequality, the growth performance and drivers for growth differed markedly among countries, allowing clusters of different growth regimes to be identified. Among them are 2 extreme types: the debt-led private-demand boom and the export-led mercantilist economies. Whereas the former rely mainly on credit-financed household consumption in order to compensate for the potential lack of demand (associated with the depressing effect of financialisation), the latter rely on net exports as the main driver of aggregate demand. Using a stock-flow consistent model it will be demonstrated how increasing inequality, depending on a countries institutional structure and regulatory framework, affects growth differently, explaining the occurrence of both regime types.

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  • Daniel Detzer, 2018. "Inequality, emulation and debt: The occurrence of different growth regimes in the age of financialization in a stock-flow consistent model," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 41(2), pages 284-315, April.
    • Handle: RePEc:mes:postke:v:41:y:2018:i:2:p:284-315
    DOI: 10.1080/01603477.2017.1387499
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    Cited by:

    1. Prante, Franz & Hein, Eckhard & Bramucci, Alessandro, 2021. "Varieties and interdependencies of demand and growth regimes in finance-dominated capitalism," IPE Working Papers 173/2021, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    2. Campana, Juan Manuel & Emboava Vaz, João & Hein, Eckhard & Jungmann, Benjamin, 2022. "Demand and growth regimes of the BRICs countries," IPE Working Papers 197/2022, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    3. Eckhard Hein & Judith Martschin, 2020. "The Eurozone in Crisis — A Kaleckian Macroeconomic Regime and Policy Perspective," Review of Political Economy, Taylor & Francis Journals, vol. 32(4), pages 563-588, October.
    4. Eckhard Hein & Judith Martschin, 2021. "Demand and growth regimes in finance-dominated capitalism and the role of the macroeconomic policy regime: a post-Keynesian comparative study on France, Germany, Italy and Spain before and after the G," Review of Evolutionary Political Economy, Springer, vol. 2(3), pages 493-527, December.
    5. Hanna Karolina Szymborska, 2022. "Rethinking inequality in the 21st century – inequality and household balance sheet composition in financialized economies," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 45(1), pages 24-72, January.
    6. Botta, Alberto & Caverzasi, Eugenio & Russo, Alberto, 2024. "Same old song: On the macroeconomic and distributional effects of leaving a Low Interest Rate Environment," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 552-570.
    7. Detzer, Daniel, 2019. "Financialization made in Germany: A review," IPE Working Papers 122/2019, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    8. Hein, Eckhard & Prante, Franz & Bramucci, Alessandro, 2022. "Financialisation and the potentials for a progressive equality-, sustainability- and domestic demand-led regime: A post-Keynesian simulation approach," IPE Working Papers 192/2022, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    9. Hein, Eckhard, 2020. "Financialisation and stagnation: A macroeconomic regime perspective," IPE Working Papers 149/2020, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    10. Carnevali, Emilio & Deleidi, Matteo & Pariboni, Riccardo & Veronese Passarella, Marco, 2021. "Cross-border financial flows and global warming in a two-area ecological SFC model," Socio-Economic Planning Sciences, Elsevier, vol. 75(C).
    11. Eckhard Hein & Franz Prante & Alessandro Bramucci, 2023. "Demand and growth regimes in finance-dominated capitalism and a progressive equality-, sustainability- and domestic demand-led alternative: A post-Keynesian simulation approach," PSL Quarterly Review, Economia civile, vol. 76(305), pages 181-202.
    12. Hein, Eckhard & Prante, Franz, 2018. "Functional distribution and wage inequality in recent Kaleckian growth models," IPE Working Papers 110/2018, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    13. Akcay, Ümit & Hein, Eckhard & Jungmann, Benjamin, 2021. "Financialisation and macroeconomic regimes in emerging capitalist economies before and after the Great Recession," IPE Working Papers 158/2021, Berlin School of Economics and Law, Institute for International Political Economy (IPE).

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