Financialisation and distribution in three main Eurozone countries from a Kaleckian perspective: France, Germany and Spain compared – before and after the crisis

In this paper we analyse the effects of financialisation on income distribution, before and after the Great Financial Crisis and the Great Recession, for three main Eurozone countries, France, Germany and Spain. We apply a Kaleckian perspective in which the focus will be on functional income distribution and thus on the relationship between financialisation and the wage share or the gross profit share. Financialisation may affect aggregate wage or gross profit shares of the economy as a whole through three channels: first, the sectoral composition of the economy, second the financial overhead costs and profit claims of the rentiers, and third the bargaining power of workers and trade unions. We examine empirical indicators for each of these channels, both before and after the crisis. We find that these countries have shown broad similarities regarding redistribution before the crisis, however, with some differences in the underlying determinants. These differences have carried through to the period after the crisis and have led to different results regarding the development of distribution since then.