What is financialization Epstein?
financialization means the increasing role of financial motives, financial markets, financial actors. and financial institutions in the operation of the domestic and international economies’ (Epstein. 2005: 3). This is a broad conception though underplaying influence on society of finance.
What is the concept of financialization?
Financialization refers to the increase in size and importance of a country’s financial sector relative to its overall economy. Financialization has occurred as countries have shifted away from industrial capitalism.
What is the financialization of the economy?
Financialization refers to the increasing importance of finance, financial markets, and financial institutions to the workings of the economy. Second, financialization has shaped patterns of inequality, culture, and social change in the broader society.
What is corporate financialization?
From the perspective of results, corporate financialization means that corporate profits are more derived from investment and cap-ital operations of non-production operations, pursuing pure capital appreciation rather than operating profit (Cai Mingrong and Ren Shichi, 2014) [10]. 2.2.
What was the significance of financialization in the neoliberal era?
For a time the expanding financial sector Page 18 Neoliberalism and Financialization 17 indirectly promoted capital accumulation in the system as a whole, by facilitating a rapid expansion of household borrowing, which made economic growth possible in the face of the wage stagnation produced by neoliberalism.
What is the financialization of capitalism?
Financialization (or financialisation in British English) is a term sometimes used to describe the development of financial capitalism during the period from 1980 to present, in which debt-to-equity ratios increased and financial services accounted for an increasing share of national income relative to other sectors.
What are the consequences of the financialization of capitalism?
Financialization distorts economic investment and reduces the mutual dependence of capital and labor, eroding the social contract in which capitalism delivers profits to the owners of capital and a growing standard of living to citizens.
What is housing financialization?
Known as the financialization of housing, the phenomenon occurs when housing is treated as a commodity—a vehicle for wealth and investment—rather than a social good. Residents are often rendered homeless, replaced by luxury housing that often stands vacant.
What are the three major decisions in financial management?
There are three decisions that financial managers have to take:
- Investment Decision.
- Financing Decision and.
- Dividend Decision.
What is the definition of Financialisation in economics?
In short, financialisation must be understood as a radical transformation within the financial sector that has altered entire economies – from the household and the firm to the functioning of monetary systems and commodity markets.
When did the financialisation of the world start?
While the beginnings of financialisation can be traced back to the 1950s, it was the fall of the Bretton Woods monetary system in the early 1970s that accelerated growth in global liquidity and prompted a surge of financial liberalisation and deregulation.
When does financialization become a dominant force in capitalism?
[Italian scholar of political economy and sociology Giovanni] Arrighi famously argued that over the course of capitalist history, financialization tends to become a dominant force when the productive economy is in decline, and when the dominant global power (or “hegemon”) is in retreat.
How is the financialization of the economy observable?
Financialization of the economy is observable at three levels: industry, firm, and household. At the industry level, the financial industry gained increasing prominence as the most profitable industry among all in the US, and arguably the most important.