Financialisation and the Financial and Economic Crises

Financialisation and the Financial and Economic Crises

Country Studies

New Directions in Modern Economics series

Edited by Eckhard Hein, Daniel Detzer and Nina Dodig

The contributions to this book provide detailed accounts of the long-term effects of financialisation and cover the main developments leading up to and during the crisis in 11 selected countries: the US, the UK, Spain, Greece, Portugal, Germany, Sweden, Italy, France, Estonia, and Turkey. The introductory chapter presents the theoretical framework and synthesizes the main findings of the country studies. Furthermore, the macroeconomic effects of financialisation on the EU as a whole are analysed in the final chapter.

Chapter 3: Monetary adjustment and inflation of financial claims in the UK after 1980

John Lepper, Mimoza Shabani, Jan Toporowski and Judith Tyson

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


This chapter explores two ways in which the UK financial system and the real economy developed out of step after 1980. It shows that companies and households took advantage of the easing of financial regulation by securing credit against assets with decreasing regard to the underlying real value of those assets. Hence, in the UK, financialisation largely took the form of inflation of financial claims.

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