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The Political Economy of Finance

44 Pages Posted: 24 Apr 2014  

Enrico C. Perotti

University of Amsterdam - Finance Group; Centre for Economic Policy Research (CEPR); Tinbergen Institute

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This survey reviews how recent political economy literature helps to explain variation in governance, competition, funding composition, and access to credit. Evolution in political institutions can account for financial evolution, and, unlike time-invariant legal institutions or cultural traits, is critical to understanding rapid changes in financial structure, such as the Great Reversal in the early 20th century. Future research should model the sources and consequences of financial instability, and predict how major redistributive shocks will shape regulatory choices and financial governance.

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Suggested Citation

Perotti, Enrico C., The Political Economy of Finance. Capitalism and Society, Vol. 9, No. 1, Article 1, 2014. Available at SSRN:

Enrico Perotti (Contact Author)

University of Amsterdam - Finance Group ( email )

Plantage Muidergracht 12
Amsterdam, 1018 TV
+31 20 525 4159 (Phone)
+31 20 525 5285 (Fax)


Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS

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