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The Financialization Response to Economic Disequilibria

The Financialization Response to Economic Disequilibria

European and Latin American Experiences

New Directions in Post-Keynesian Economics series

Edited by Noemi Levy and Etelberto Ortiz

Europe and Latin America’s social and economic stagnation is a direct result of the unresolved phenomena of the financialization crisis that broke out in 2008 in developed countries. Editors Noemi Levy and Etelberto Ortiz analyze the limitations of economic growth and development under capitalist economic organizations where financial capital is dominant, as well as explore alternative economic policies.

Chapter 8: Financialization, crisis and economic policy

Hassan Bougrine and Louis-Philippe Rochon

Subjects: development studies, development economics, economics and finance, financial economics and regulation, political economy, post-keynesian economics


In the chapter, ‘Transformations of entrepreneurial capitalism, crises and the need for a radical change in economic policy,’ the authors argue that the financial and economic crisis that began in 2007 is part of a general breakdown in the corporate capitalist order that affects real and financial sectors alike. They identify two practices that have generated profound changes in the capitalist system, which altered the practices of financial and banking institutions, enabling financiers to concentrate their wealth independently of the productive sector. This has combined with austerity-based economic policies that have caused productive activity to stagnate below full employment levels.

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