Financialization - the increasing importance of financial markets, institutions and motives in the world economy - is described and analyzed in this rigorously researched volume. The contributors, top scholars in their fields, explore the quantitative and qualitative dimensions of financialization and tally its costs and benefits for society as a whole. They explore the puzzling promotion of financial liberalization by governments despite its enormous costs, and describe what can be done to alter the destructive path toward excessive financialization that most countries are taking.The book begins by presenting basic data on the distributional implications of financialization. Part two focuses on financialization in the context of the US economy, with discussion of the relationship between financialization and non-financial corporations, the stock market bubble, and the evolution of derivatives markets. The international dimensions of financialization are explored in part three, with particular attention paid to the evolution of the international monetary system. Part four presents five case studies of financialization and financial crises in emerging markets in the 1980s and 1990s: Mexico, Turkey, Argentina, Brazil, and South Korea. The final section offers ideas for policy responses, including capital controls and securities transaction taxes.
Researchers and students of international economics and finance will find this provocative volume an important part of the debate surrounding this multi-faceted phenomenon.
Contents:
Preface
PART I: INTRODUCTION AND DISTRIBUTIONAL IMPLICATIONS
1. Introduction: Financialization and the World Economy
Gerald A. Epstein
2. Costs and Benefits of Neoliberalism: A Class Analysis
Gérard Duménil and Dominique Lévy
3. The Rise of Rentier Incomes in OECD Countries: Financialization, Central Bank Policy and Labor Solidarity
Gerald A. Epstein and Arjun Jayadev
PART II: FINANCIALIZATION AND THE US ECONOMY
4. The Neoliberal Paradox: The Impact of Destructive Product Market Competition and 'Modern' Financial Markets on Nonfinancial Corporation Performance in the Neoliberal Era
James Crotty
5. The Late 1990s' US Bubble: Financialization in the Extreme
Robert W. Parenteau
6. Derivatives Markets: Sources of Vulnerability in US Financial Markets
Randall Dodd
PART III: FINANCIALIZATION AND THE INTERNATIONAL MONETARY SYSTEM
7. Financial Globalization, Exchange Rates and International Trade
Robert A. Blecker
8. The Eurodollar Market and the New Era of Global Financialization
Edwin Dickens
9. The Role of the International Monetary System in Financialization
Jane D'Arista
PART IV: CASE STUDIES OF FINANCIALIZATION AND ECONOMIC CRISIS
10. The Rise of the New Money Doctors in Mexico
Sarah Babb
11. The Making of the Turkish Financial Crisis
Yilmaz Akyüz and Korkut Boratav
12. The Recent Crisis - and Recovery - of the Argentine Economy: Some Elements and Background
Arturo O'Connell
13. International Liquidity and Growth Fluctuations in Brazil
Nelson H. Barbosa-Filho
14. The Causes and Consequences of Neoliberal Restructuring in Post-Crisis Korea
James Crotty and Kang-Kook Lee
PART IV: POLICY PERSPECTIVES
15. Averting Crisis? Assessing Measures to Manage Financial Integration in Emerging Economies
Ilene Grabel
16. Why International Capital Mobility Should be Curbed and How it Could be Done
David Felix
17. Applying a Securities Transactions Tax to the US: Design Issues, Market Impact and Revenue Estimates
Robert Pollin
Index
