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It's financialization!

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  • Freeman, Richard Barry

Abstract

Wall Street's 2007–09 implosion and the ensuing global recession highlight the crucial relationship between finance and the economy. Governments, international agencies and experts had failed to detect rising risk levels in the deregulated financial sector. The author outlines the resulting huge cost in lost jobs and likely reductions in public goods and growth, as economies restabilize budgets after paying for massive bailouts and stimulus packages. Specifically, he assesses the role of monetary incentives for rent-seeking in the decisions that led to the crisis. Finally, he makes the case for radical reform of the institutions linking finance and the real economy.

Suggested Citation

  • Freeman, Richard Barry, 2010. "It's financialization!," Scholarly Articles 34548957, Harvard University Department of Economics.
    • Handle: RePEc:hrv:faseco:34548957
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    File URL: http://dash.harvard.edu/bitstream/handle/1/34548957/Its%20Financialization_IntlLabourReview-Vol149_2010.pdf
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    References listed on IDEAS

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    1. Andrew E. Clark, 2003. "Unemployment as a Social Norm: Psychological Evidence from Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 21(2), pages 289-322, April.
    2. Christopher S. Armstrong & Alan D. Jagolinzer & David F. Larcker, 2010. "Chief Executive Officer Equity Incentives and Accounting Irregularities," Journal of Accounting Research, Wiley Blackwell, vol. 48(2), pages 225-271, May.
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    Cited by:

    1. Asongu, Simplice & De Moor, Lieven, 2015. "Recent advances in finance for inclusive development: a survey," MPRA Paper 67299, University Library of Munich, Germany.
    2. Gallegati, Marco & Kirman, Alan, 2021. "Introduction to the special issue on “New macroeconomic perspectives on inequality, credit, and stability”," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 884-886.
    3. Simplice A. Asongu & Jacinta C. Nwachukwu, 2018. "Recent finance advances in information technology for inclusive development: a systematic review," Netnomics, Springer, vol. 19(1), pages 65-93, October.
    4. Asongu, Simplice, 2015. "Rational Asymmetric Development, Piketty and the Spirit of Poverty in Africa," MPRA Paper 67301, University Library of Munich, Germany.
    5. repec:jle:journl:173 is not listed on IDEAS
    6. Marta Rocchi & David Thunder, 2019. "Can a Good Person be a Good Trader? An Ethical Defense of Financial Trading," Journal of Business Ethics, Springer, vol. 159(1), pages 89-103, September.
    7. Simplice Asongu & Ndemaze Asongu, 2018. "The comparative exploration of mobile money services in inclusive development," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 45(1), pages 124-139, January.
    8. Simplice A. Asongu & Jacinta C. Nwachukwu, 2016. "Rational Asymmetric Development, Piketty and Poverty in Africa," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 13(2), pages 221-246, December.
    9. Simplice A. Asongu & Jacinta C. Nwachukwu, 2017. "Recent finance advances in information technology for inclusive development: a survey," Research Africa Network Working Papers 17/009, Research Africa Network (RAN).
    10. Heshmati, Almas & Kim, Jungsuk, 2014. "A Survey of the Role of Fiscal Policy in Addressing Income Inequality, Poverty Reduction and Inclusive Growth," IZA Discussion Papers 8119, Institute of Labor Economics (IZA).
    11. Lothar Funk, 2010. "Die europäische Flexicurity-Strategie : ein Überblick zu wichtigen Vor- und Nachteilen. The European Flexicurity-Strategy : A Survey on Important Pros and Cons," Duesseldorf Working Papers in Applied Management and Economics fobe15, Duesseldorf University of Applied Sciences.
    12. Irene Brunetti & Davide Fiaschi & Lisa Gianmoena & Angela Parenti, 2017. "Volatility in European regions," Papers in Regional Science, Wiley Blackwell, vol. 96(4), pages 697-720, November.
    13. Tang, Kai, 2024. "The influence of managerial ability on corporate financialization," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 1229-1245.
    14. Tonæi Svilokos & Ivan Burin, 2017. "Financialization and its impact on processof deindustrialization in the EU," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 35(2), pages 583-610.
    15. Ribeiro, Barbara & Shapira, Philip, 2020. "Private and public values of innovation: A patent analysis of synthetic biology," Research Policy, Elsevier, vol. 49(1).
    16. Kun Su & Heng Liu, 2021. "Financialization of manufacturing companies and corporate innovation: Lessons from an emerging economy," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(4), pages 863-875, June.

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