Chapter 8: Conclusion
Recent decades have witnessed an explosion in everything ﬁnancial. Financial markets have grown enormously in both size and signiﬁcance. They have started to command ever greater resources and have acquired an important role in the governance of NFCs. The share of income allocated to ﬁnancial institutions has skyrocketed, while nonﬁnancial institutions have also increasingly become involved in investments in ﬁnancial assets and ﬁnancial subsidiaries. All these developments have been discussed extensively in the ever-growing ﬁnancialization literature. In the ﬁrst chapter of this book, I drew attention to the vague and imprecise nature of the concept and after a review of diﬀerent deﬁnitions and usages of it; I oﬀered a clear deﬁnition of ﬁnancialization, suitable for analytical use. Here, ﬁnancialization was deﬁned at two levels: At the general level, ﬁnancialization refers to an increase in the size and signiﬁcance of ﬁnancial markets, transactions and institutions. At a narrower level, I used ﬁnancialization to designate changes in the relationship between the nonﬁnancial corporate sector and ﬁnancial markets. These latter changes include, ﬁrst, an increase in ﬁnancial investments and hence ﬁnancial incomes, of the NFCs; and second, an increase in ﬁnancial market pressure on the management of NFCs and an associated rise in transfers made to ﬁnancial markets in the forms of interest payments, dividend payments and stock buybacks. In the second chapter, I documented various aspects of the rise of ﬁnance in the US economy through simple descriptive time-series statistics. The third chapter...
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