The Macroeconomics of Finance-Dominated Capitalism – and its Crisis

The Macroeconomics of Finance-Dominated Capitalism – and its Crisis

Eckhard Hein

In this timely and thought-provoking book, Eckhard Hein illustrates that the Great Recession, which hit the world economy in 2008/09, is rooted in the contradictions of finance-dominated capitalism. The author provides an in-depth exploration of the macroeconomics of finance-dominated capitalism, its problems and its crisis, and presents economic policy lessons and alternatives.

Preface and acknowledgements

Eckhard Hein

Subjects: economics and finance, financial economics and regulation, post-keynesian economics

Extract

This book presents my latest research on the macroeconomics of financedominated capitalism and the recent financial and real crises of developed capitalist economies. This research started in late 2004/early 2005 when I prepared my oral ‘habilitation’ presentation for Carl von Ossietzky University, Oldenburg, as part of the German qualifying exam for becoming a full professor. I had to propose three topics to the ‘habilitation’ committee, and one of them was ‘Financial Structure and Economic Growth: Theoretical and Empirical Aspects’. Among the three topics I suggested this was the one I was least familiar with at that stage, but which for me seemed to be the most interesting. Quite unexpectedly to me, the committee thought so, too, and chose this subject for the presentation. This meant hard work for me over Christmas break 2004/05 catching up with the relevant literature in that area and preparing a kind of overview presentation with some conclusions for further research. Then, during the following years as a Senior Researcher at the Macroeconomic Policy Institute (IMK) at Hans Boeckler Foundation, Düsseldorf, Germany, I started to link the existing literature and empirical findings with the Kaleckian/ Post-Keynesian approaches to distribution and growth, with which I was quite familiar and to which I had already contributed. This research agenda was supported and accelerated when Till van Treeck joined the IMK as my first PhD student in early 2007. We started to build different types of models in order to integrate financial topics, and what was by then...