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 7: Financialisation and the crises in the export-led mercantilist German economy

Daniel Detzer and Eckhard Hein

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


This study on Germany examines the long-run changes between the financial and the non-financial sectors of the economy, and in particular the effects of these changes on the macroeconomic developments that have led or contributed to the financial crisis starting in 2007 and the Great Recession in 2008/09. The first part provides some descriptive statistics on real GDP growth, on the growth contributions of the main demand aggregates, and the financial balances of the macroeconomic sectors since the early 1980s, and it classifies the German type of development as ‘export-led mercantilist’. The second part examines the effects of an increasing dominance of finance since the early/mid-1990s on income distribution, investment in capital stock, consumption and the current account in more detail. The third part links the long-run developments with the financial and economic crisis and examines the causes of the quick recovery in Germany.

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