The Financialization of the American Economy

Posted: 29 Feb 2008

See all articles by Greta R. Krippner

Greta R. Krippner

University of California, Los Angeles (UCLA) - Department of Sociology

Date Written: May 2005

Abstract

This paper presents systematic empirical evidence for the financialization of the US economy in the post-1970s period. While numerous researchers have noted the increasing salience of finance, there have been few systematic attempts to consider what this shift means for the nature of the economy, considered broadly. In large part, this omission reflects the considerable methodological difficulties associated with using national economic data to assess the rise of finance as a macro-level phenomenon shaping patterns of accumulation in the US economy. The paper develops two discrete measures of financialization and applies these measures to postwar US economic data in order to determine if, and to what extent, the US economy is becoming financialized. The paper concludes by considering some of the implications of financialization for two areas of ongoing debate in the social sciences: (1) the question of who controls the modern corporation; and (2) the controversy surrounding the extent to which globalization has eroded the autonomy of the state.

JEL Classification: G3 Corporate finance and governance; N220 Economic

Suggested Citation

Krippner, Greta R., The Financialization of the American Economy (May 2005). Socio-Economic Review, Vol. 3, pp. 173-208, , Available at SSRN: https://ssrn.com/abstract=811461

Greta R. Krippner (Contact Author)

University of California, Los Angeles (UCLA) - Department of Sociology ( email )

Los Angeles, CA
United States

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