A Synthetic, Stock-Flow Consistent Macroeconomic Model of Financialisation

No 06-2007, IMK Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute

Abstract: This article is centred around the notions of shareholder value orientation and financialisation. Shareholder value orientation is reflected by a high dividend payout ratio applied by firms and the reluctance of firms to finance physical investment via new equity issues. Financialisation is the more general development towards an increased importance of the financial sector of the economy relative to the non-financial sector. In this article, a synthetic, stock-flow consistent model is developed that attempts to encompass and at times adjust some important recent works on the effects of financialisation. This includes contributions from the fields of mainstream information economics and Post Keynesian economics. We conduct simulations reflecting increased shareholder value orientation and show that the model produces a number of results that appear consistent with many stylised facts particularly of the US economy since the early 1980s.

Keywords: Stocks and Flows; Corporate Governance; Investment Finance; Payout Policy; Income Distribution (search for similar items in EconPapers)
JEL-codes: D14 E10 E21 E25 G11 G32 G35 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2007-05
New Economics Papers: this item is included in nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.boeckler.de/pdf/p_imk_wp_06_2007.pdf (application/pdf)

Related works:
Journal Article: A synthetic, stock--flow consistent macroeconomic model of 'financialisation' (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imk:wpaper:06-2007

Access Statistics for this paper

More papers in IMK Working Paper from IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Nemitz ().