Have We Been Here Before? Phases of Financialization within the 20th Century in the United States

Levy Economics Institute, Working Papers Series No. 869

39 Pages Posted: 27 Jun 2016 Last revised: 28 Aug 2016

See all articles by Apostolos Fasianos

Apostolos Fasianos

Brunel University London - Department of Economics and Finance

Diego Guevara

Universidad de la Sabana

Christos Pierros

National and Kapodistrian University of Athens; Labour Institute - Greek General Confederation of Labour

Date Written: June 27, 2016

Abstract

This paper explores from a historical perspective the process of financialization over the course of the 20th century. We identify four phases of financialization: the first, from the 1900s to 1933 (early financialization); the second, from 1933 to 1940 (transitory phase); the third, between 1945 and 1973 (definancialization); and the fourth period begins in the early 1970s and leads to the Great Recession (complex financialization). Our findings indicate that the main features of the current phase of financialization were already in place in the first period. We closely examine institutions within these distinct financial regimes and focus on the relative size of the financial sector, the respective regulation regime of each period, and the intensity of the shareholder value orientation, as well as the level of financial innovations implemented. Although financialization is a recent term, the process is far from novel. We conclude that its effects can be studied better with reference to economic history.

Keywords: Financialization, Monetary Regimes, Speculation

JEL Classification: E42, Ε44, Β52

Suggested Citation

Fasianos, Apostolos and Guevara, Diego and Pierros, Christos, Have We Been Here Before? Phases of Financialization within the 20th Century in the United States (June 27, 2016). Levy Economics Institute, Working Papers Series No. 869, Available at SSRN: https://ssrn.com/abstract=2801088 or http://dx.doi.org/10.2139/ssrn.2801088

Apostolos Fasianos (Contact Author)

Brunel University London - Department of Economics and Finance ( email )

Kingston Lane
Uxbridge, Middlesex UB8 3PH
United Kingdom

Diego Guevara

Universidad de la Sabana ( email )

Campus Universitario del Puente del Común, Km. 7
Chia, Cundinamarca A.A.140122
Colombia

Christos Pierros

National and Kapodistrian University of Athens ( email )

5 Stadiou Strt
Athens, 12131
Greece

Labour Institute - Greek General Confederation of Labour ( email )

71A Emmanouil Benaki str.,
Athens, 10681
Greece

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