Palma, J. G.
Financialisation as a (it’s-not-meant-to-make-sense) gigantic global joke
On how easy rents lead to lazy elites (and a ‘latinoamericanised’ West); on perpetual manias; on how theory and policy confuse ‘means’ with ‘ends’; and on emerging countries as “financial markets of last resort
CWPE2211
Abstract: This paper analyses events in financial markets since the 2008 financial crisis in both the developed and the developing worlds, giving especial attention to the processes of ‘financialisation’; that is, to the combined effect of the growing size and dominance of the financial sector relative to the non-financial sector, and the diversification towards financial activities in non-financial corporations. The main conclusion is that we are paying the price (and a huge one) for two related phenomena; one belongs to the realm of ideology and knowledge, the other to ‘power play’.
Keywords: manias, panics, financialisation, QE, excess liquidity, ‘disconnect’ between the financial and the real worlds, emerging markets, Latin America, Asia, Keynes, Kindleberger, Minsky, Buchanan
JEL Codes: E22 D70 D81 E51 F02 F21 F32 F40 F63 G15 G20 G30 L51 N20 O16
Author links: Jose Gabriel Palma
PDF: https://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe2211.pdf 
Open Access Link: https://doi.org/10.17863/CAM.81914
