Chapter 9: Summary and Conclusions
9. Summary and conclusions In this book we have provided a systematic macroeconomic perspective on finance-dominated capitalism and its crisis. We have argued that from a macroeconomic perspective financialization has, since the early 1980s, affected long-run economic developments in the developed capitalist economies in particular through the following three channels: re-distribution of income at the expense of low labour incomes, dampening of investment in real capital stock, and an increasing potential for wealth-based and debt-financed consumption. Against the background of these basic macroeconomic tendencies, rising current account imbalances at the global, but also at the European level have developed and have contributed to the severity of the Great Recession. In Chapter 2 three dimensions of re-distribution in the course of financialization and neo-liberalism since the early 1980s have been outlined and examined for the major Euro area countries, Austria, Belgium, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, and Spain, for Sweden and the UK as EU countries outside the Euro area, and for the US, Japan, and China: functional distribution, personal distribution and the development of top incomes. We have shown that the period of financedominated capitalism was associated with falling labour income shares in almost all of these countries, with increasing inequality in personal income distribution in many countries and with rising income shares of the very top incomes, in particular in the UK and the US. Since we consider the development of functional income distribution to be the key to the understanding of the distributional effects of financialization,...
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