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Financialization and Secular Stagnation in the U.S. Economy

  • The thesis discusses financialization and secular stagnation in the U.S. economy since the 1980s. The theoretical part outlines the historical approach of the main scholars who have discussed secular stagnation before and since the emergence of financialization. It illustrates the shortcomings of the current mainstream debate. Furthermore, it then focuses on the relationship between the two phenomena on the basis of heterodox approaches. Both Marxian and Post-Keynesian researchers consider financializaion to be responsible for producing stagnation tendencies. They agreed about the temporary counteracting role of financial expansion in addition to its role in producing bubbles and contradictions. They agree about the channel of accumulation but each of them views it in a different way. Further, they agree also on the impact of income inequality but again each of them recognizes this in a different way. However, they differ in describing the structure of financialization and in how they explain the relationship between policy and that structure. The thesis finds that the Steindlian model finds some common ground between the two paradigms. The data presented illustrates the validity of the model. It is found that the stagnation trend before crisis was pushed by decreasing accumulation in capital stock and increasing inequality. However, despite the existence of increasing inequality household expenditure increased since the compensating factor, “household debt”, was increasing. After the crisis Stagnation tendencies reemerged because of the slowing down of household expenditure. Household expenditure was therefore negatively influenced by increasing inequality and this post-crisis fall in debt. The accumulation channel also contributed to stagnation since the increase in investment was small.

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Metadaten
Author:Maen Khaled
URN:urn:nbn:de:kobv:b721-opus4-12453
Referee:Eckhard Hein
Advisor:Trevor Evans
Document Type:Master's Thesis
Language:English
Date of first Publication:2018/12/18
Publishing Institution:Hochschulbibliothek HWR Berlin
Granting Institution:Hochschule für Wirtschaft und Recht Berlin
Date of final exam:2017/07/24
Release Date:2018/12/18
Tag:Financialization; Income Inequality; Marxian; Post-Keynesian; Secular Stagnation; Steindlian Model
Page Number:63
Institutes:FB I - Wirtschaftswissenschaften / International Economics M.A.
Licence (German):License LogoUrheberrechtsschutz