Something a bit different for MoneyScience on a Friday afternoon. This is a paper authored by Greta R. Krippner, a sociologist from UCLA, in 2005.
With banks at the forefront of an apparently increasingly omnipresent financial sector, their growing presence has been named "financialisation". There have been many attempts to give quantitative substance to this impression and in this paper Krippner offers one of the more systematic and rigorous.
Abstract
This paper presents systematic empirical evidence for the financialization of the US economy in the post-1970s period. While numerous researchers have noted the increasing saleince of finance, there have been few systematic attempts to consider what this shift means for the nature of the economy, considered broadly. In large part, this ommission reflects the considerable methodological difficulties associated with using national economic data to assess the rise of finance as a macro level phenomenon shaping patterns of accumulation in the US economy. This paper develops two discrete measure of financialization and applies these measures to postwar US economic data in order to determine if, and to what extent, the US ecomomy is being financialized. The paper concludes by considering some of the implications of financialization for two areas of ongoing debate in the social sciences: (1) the question of who controls the modern corporation; and (2) the controversy surrounding the extent to which globalization has eroded the autonomy of the state.
From Greta's Home Page:
The objective of my current research is to assess the significance of the growing salience of finance in the U.S. economy in the post-1970s period for debates on the nature of contemporary economic change. I seek to answer several questions about financialization: First, to what extent does the empirical evidence support the claim that we are living in a period in which we can reasonably describe the U.S. economy as having been “financialized”? In a related vein, if there is evidence for financialization, what do the data tell us about the particular timing and magnitude of this phenomenon? Second, what role has the state played in creating the conditions that have promoted and sustained financialization? Which state actors were involved in creating policies favorable to the turn to finance, and where did these policies produce lines of fissure, either within the state or between the state and relevant social actors? Third, how has the terrain upon which the state intervenes in the economy been reconfigured by processes associated with the financialization of the U.S. economy? Has the line between state and market effectively been redrawn in a world in which financial markets dominate the economy? I use each of these questions to critically interrogate one of three standard ways of thinking about the salient shifts that characterize recent historical experience: postindustrialism, globalization, and neoliberalism. In all three cases, I argue that an analysis of financialization can help us make sense of the proliferation of apparently new social forms that have been reshaping capitalist social relations since the 1970s—as well as the social and political limits associated with living in a time of such fervent experimentation.
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Managing Credit Risk: The Great Challenge for Global Financial Markets, 2nd Edition
John B. Caouette, Edward I. Altman, Paul Narayanan and Robert Nimmo
A timely follow-up to the widely successful Managing Credit Risk, which is regarded as essential reading for anyone involved within the field of credit.
ISBN: 9780470118726 - 06-Jun-08 - £65.00