Abstract
Jesús Ferreiro, in this chapter, titled “Macroeconomic Lessons from the Financialisation Process”, has the objective in contribution to outline the main macroeconomic lessons resulting from the financialisation process. This chapter is structured into four main sections. The first section will focus on the definition of the financialisation process. The second section will focus on the consequences of the financialisation process on economic activity in general and on the activity carried out by particular sectors and agents. The third section will deal with the Great Recession as far as there is an extended consensus on the key role played by the excessive growth of finances on the burst of the crisis. This study will pay attention to the different impacts of the economic and financial crises in European countries and on the consequences generated by the management of macroeconomic policies, mainly in developed and European countries. The final section will be devoted to the consequences of financialisation on the European integration process.
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Notes
- 1.
In a survey conducted to evaluate the foresights of a set of experts about the future of finance up to the year 2025, 88 per cent of experts estimated highly likely (i.e., with a probability above 50 per cent) the burst of a new financial crisis, whose origin will be at the non-banking financial sector (Ferreiro et al. 2016b).
- 2.
It must be emphasised that in this scenario even the concept of full employment changes. The concept of full employment abandons its Keynesian meanings. That is, it is no longer defined as a low unemployment rate (say, three per cent of active population) or a situation in which any worker willing to work at the prevailing market wage has a job. In the New Consensus Macroeconomics terminology, full employment is identified as a non-accelerating inflation rate of unemployment (NAIRU) or non-accelerating wages rate of unemployment (NAWRU). That is, it is the unemployment rate compatible with the target of inflation rates, keeping stable such a rate. This implies that the labour market is at an equilibrium situation (a market-clearing equilibrium). Therefore, full employment, or the NAIRU, can exist with any unemployment rate, regardless how high it can look. If such a figure of unemployment is socially, politically or economically considered as excessive, then structural reforms in the labour market, making it more flexible, would have to be implemented.
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Ferreiro, J. (2018). Macroeconomic Lessons from the Financialisation Process. In: Arestis, P. (eds) Alternative Approaches in Macroeconomics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-69676-8_8
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