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A note on financialization from a Classical-Keynesian standpoint

Author

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  • Stefano Di Bucchianico
Abstract
In this paper we present a Classical-Keynesian viewpoint on financialization by using Garegnani’s ‘integrated wage-commodity sector’ method. We focus on three aspects. First, we argue that financial instruments such as derivatives have played the role of ‘luxury’ goods, unnecessary and/or detrimental to the direct and indirect production of the wage-basket. Second, we show that the accumulation of household debt can result in a higher normal rate of profit. Third, there is scope to reconsider the connection between financialization and labour market institutions, which makes labour bargaining strength wane. Labour market relationships need not be strictly tied to financialization.

Suggested Citation

  • Stefano Di Bucchianico, 2020. "A note on financialization from a Classical-Keynesian standpoint," Department of Economics University of Siena 824, Department of Economics, University of Siena.
    • Handle: RePEc:usi:wpaper:824
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    Cited by:

    1. Zolea, Riccardo, 2021. "The relation between interest rate and profit rate: the role of bank profitability in an endogenous money framework," MPRA Paper 108973, University Library of Munich, Germany.
    2. Loretta Mastroeni & Alessandro Mazzoccoli & Greta Quaresima & Pierluigi Vellucci, 2021. "Wavelet analysis and energy-based measures for oil-food price relationship as a footprint of financialisation effect," Papers 2104.11891, arXiv.org, revised Mar 2022.
    3. Stefano Di Bucchianico & Federica Cappelli, 2021. "Exploring the theoretical link between profitability and luxury emissions," Working Papers PKWP2114, Post Keynesian Economics Society (PKES).
    4. Pierluigi Vellucci, 2021. "A critique of financial neoliberalism: a perspective combining multidisciplinary methods and commodity markets," SN Business & Economics, Springer, vol. 1(3), pages 1-11, March.
    5. Zolea, Riccardo, 2022. "A Model of the Relationship between the Interest Rate and the Profit Rate," Centro Sraffa Working Papers CSWP55, Centro di Ricerche e Documentazione "Piero Sraffa".

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    More about this item

    Keywords

    financialization; household debt; labour market; rate of profit; financial markets;
    All these keywords.

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G5 - Financial Economics - - Household Finance

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