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Financial Capital and Industrial Capital. A Dichotomy that Tends to Evolve into an Antinomy

Author

Listed:
  • Garofalo, Giuseppe

    (Università della Tuscia)

  • Guarini, Giulio

    (Università della Tuscia)

Abstract

The theoretical framework of the paper is the Veblenian theory of the business and financial cycle. Compared to similar, contemporary (K. Wicksell and I. Fisher) or later (H. Minsky and F. Vicarelli), models, the basic idea and the novelty are the identification of a gradual trend towards the financialisation of the economies. The core of the paper is represented by an econometric valuation, for OECD countries, during the period 1998-2009, that considers as regressors of investments, also a “financialisation” index concerning share and other equity of investment funds. A second econometric analysis is proposed to quantify the determinants of the process of financialisation, that in our interpretation depends also upon the relative profitability between finance sector and productive sector. The results of the analysis verify both the connection between real accumulation and financial accumulation, and the antinomy between the two sectors of an economy.

Suggested Citation

  • Garofalo, Giuseppe & Guarini, Giulio, 2014. "Financial Capital and Industrial Capital. A Dichotomy that Tends to Evolve into an Antinomy," European Journal of Economic and Social Systems, Lavoisier, vol. 26(1-2), pages 113-131.
    • Handle: RePEc:ris:ejessy:0013
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    Keywords

    finance and economy; investment function;

    JEL classification:

    • B00 - Schools of Economic Thought and Methodology - - General - - - History of Economic Thought, Methodology, and Heterodox Approaches
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G01 - Financial Economics - - General - - - Financial Crises

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