Hein et al (eds ) financialisation and the financial and economic crises; country issues (2016)

© Eckhard Hein, Daniel Detzer and Nina Dodig 2016 All rights reserved No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher Published by Edward Elgar Publishing Limited The Lypiatts 15 Lansdown Road Cheltenham Glos GL50 2JA UK Edward Elgar Publishing, Inc William Pratt House Dewey Court Northampton Massachusetts 01060 USA A catalogue record for this book is available from the British Library Library of Congress Control Number: 2016931736 This book is available electronically in the Economics subject collection DOI 10.4337/9781785362385 ISBN 978 78536 237 (cased) ISBN 978 78536 238 (eBook) Typeset by Servis Filmsetting Ltd, Stockport, Cheshire 01 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:20:56PM via free access Contents List of contributorsvii Preface and acknowledgementsxv   1 Financialisation and the financial and economic crises: theoretical framework and empirical analysis for 15 countries Nina Dodig, Eckhard Hein and Daniel Detzer   The crisis of finance-­led capitalism in the United States Trevor Evans   3 Monetary adjustment and inflation of financial claims in the UK after 1980 John Lepper, Mimoza Shabani, Jan Toporowski and Judith Tyson 42 68   Financialisation and the economic crisis in Spain Jesús Ferreiro, Catalina Gálvez and Ana González 89   Financialisation and the crises: the case of Greece Yanis Varoufakis and Lefteris Tserkezis 114   6 The real sector developments in Estonia: financialisation effects behind the transition process Egert Juuse 137   7 Financialisation and the crises in the export-­led mercantilist German economy Daniel Detzer and Eckhard Hein 163   Swedish financialisation: ‘Nordic noir’ or ‘safe haven’? Alexis Stenfors 192   9 France, a domestic demand-­led economy under the influence of external shocks Gérard Cornilleau and Jérôme Creel 214 10 The transmission channels between the financial and the real sectors in Italy and the crisis Giampaolo Gabbi, Elisa Ticci and Pietro Vozzella 234 v Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:22:29PM via free access vi Financialisation and the financial and economic crises 11 The long boom and the early bust: the Portuguese economy in the era of financialisation Ricardo Paes Mamede, Sérgio Lagoa, Emanuel Leão and Ricardo Barradas 12 Financialisation and the financial and economic crises: the case of Turkey Serdal Bahỗe, Hasan Cửmert, Nilgỹn Erdem, Elif Karaỗimen, Ahmet Haim Kửse, ệzgỹr Orhangazi, Gửkỗer ệzgỹr and Galip L Yalman 13 The impact of the financial and economic crises on European Union member states Carlos A Carrasco, Jesús Ferreiro, Catalina Gálvez, Carmen Gomez and Ana González 255 275 299 Index321 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:22:29PM via free access Contributors Serdal Bahỗe got his BSc degree from the Department of Computer Engineering at Middle East Technical University in 1994 He completed the master’s program and his PhD at the Department of Economics in the same university in 1998 and 2003, respectively He worked as a research assistant in the same department between 1997 and 2003 In 2006, he began to work in the Department of Public Finance at Ankara University He has been studying income distribution, public finance and history of economic thought Ricardo Barradas is a PhD candidate in Economics at ISCTE – University Institute of Lisbon He is a teaching assistant at the Higher School of Communication and Media Studies and Higher School of Accounting and Administration of Lisbon (Polytechnic Institute of Lisbon) and a research assistant at Dinâmia’CET – IUL His main research interests are in the fields of financial markets, financial systems, monetary policy and other related areas He has worked for four years in the Portuguese banking system as a financial markets analyst Carlos A Carrasco is a CONACYT Postdoctoral Research Fellow at the School of Economics, National Polytechnic Institute (SEPI-­ ESE-­ IPN, Mexico) and a member of the National System of Researchers of Mexico (SNI-­I) Previously, he was a FESSUD Research Fellow at the Department  of Applied Economics V of the University of the Basque Country (UPV/EHU) where he obtained a PhD degree in Economic Integration His current and past research fields include macroeconomic stabilisation in Latin America, inflation targeting implementation and functioning, global and European imbalances, and European integration He has lectured in macroeconomics, macroeconomic policy, fiscal policy and introductory econometrics Hasan Cömert is an Assistant Professor of Economics at the Department of Economics at Middle East Technical University (METU), Turkey Cömert received his PhD from the University of Massachusetts at Amherst in 2011 His research interests include central banking, financial markets, financial flows and developing countries and the Turkish economy Among others, he is the author of Central Banks and Financial Markets: The Declining Power of vii Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:22:35PM via free access viii Financialisation and the financial and economic crises US Monetary Policy (published by Edward Elgar in 2013) and he has edited another forthcoming book (with Rex McKenzie) called The Global South after the Crisis, which will be published by Edward Elgar Cömert has contributed to different work packages of the FESSUD project as a researcher Gérard Cornilleau is a macroeconomist and a specialist in neo-­Keynesian models and he was involved in the building of three important models of the French economy: The REGINA model that simulated the French economy disaggregated in five big regions; the MOGLI model, one of the first generation of dynamic macro models, and the Trimestrial model of OFCE, used for short and medium term economic forecasts From 1974 to 1987 he was a researcher at the Group of Applied Macroeconomic Analysis (GAMA) of the University of Paris-­X From 1988 to 1998 he was Scientific Advisor and Deputy Director of the econometrics department of the OFCE From 1999 to 2002 he was Deputy Director of Syntheses, Economic Studies and Evaluation at the Directorate of Studies, Research, Evaluation and Statistics (DREES) of the Ministry of Employment and Solidarity and, since July 2002, Deputy Director of the Department of Studies of the OFCE He is now a scientific advisor at OFCE Jérôme Creel is Director of the Research Department at Observatoire Franỗais dộs Conjonctures Economiques (OFCE/Sciences Po, Paris) and Associate Professor of Economics at ESCP Europe He holds a PhD from University Paris-­Dauphine in Economics His recent works have dealt with economic policies in the Euro area, notably with regards to reforms of the Stability and Growth Pact, published in Journal of Economic Dynamics and Control, and the relationships between financial stability, monetary policy and economic performance, published in Economic Modelling and Journal of Financial Stability Jérôme Creel participates in the iAGS reports, in the EU funded projects FESSUD and RASTANEWS, and in the OFCE team working as Expert for the European Parliament Economic and Monetary Affairs Committee for the Monetary Dialogue with the European Central Bank Daniel Detzer obtained a BA in Economics and a MA in International Economics He works as FESSUD Research Fellow at the Department of Business and Economics of the Berlin School of Economics and Law His current and past research fields include banking and financial systems, financial crises, financial regulation, macroeconomics and European imbalances He also has four years of practical experience in finance, having worked for German and French banking institutions Nina Dodig has degrees in Economics of Tourism from the University of Perugia and in International Economics from the Berlin School of Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:22:35PM via free access Contributors ­ix Economics and Law She is a lecturer in macroeconomics and in European economic policies at the Berlin School of Economics and Law Her main research interests are in the field of finance and financial systems, financial crises, European economic policies and post-­Keynesian macroeconomics Nilgün Erdem received her PhD from the University of Ankara in Economics In 1999–2000 she studied as a visiting researcher at the Department of Economics at the University of Notre Dame (USA) Her current research is on financial crises, labour markets, development and international political economy Trevor Evans has degrees in Political Science from the University of Kent at Canterbury and in Economics from the University of London He worked for many years at the Centre for Economic and Social Research in Managua, Nicaragua, and was Professor of Monetary Theory, Monetary Policy and International Monetary Relations at the Berlin School of Economics and Law from 2006 until 2015 Jesús Ferreiro is Associate Professor of Economics at the University of the Basque Country UPV/EHU, in Bilbao, Spain, and an Associate Member of the Centre for Economic and Public Policy, University of Cambridge, and an Associate Member of the NIFIP, University of Porto His research interests are in the areas of macroeconomic policy, labour markets and international economy He has published a number of articles on those topics in edited books and in refereed journals such as American Journal of Economics and Sociology, Applied Economics, Economic and Industrial Democracy, European Planning Studies, International Labour Review, International Review of Applied Economics, Journal of Economic Issues, Journal of Economic Policy Reform, Journal of Post Keynesian Economics, Panoeconomicus and Transnational Corporations, among others Giampaolo Gabbi is Professor of Financial Investments and Risk Management at the University of Siena, Italy, and he is Director of the Banking and Insurance Department of SDA Bocconi School of Management He holds a PhD in Banking and Corporate Management from Bocconi University He has been a lecturer at City University, London (2009–2013) He has published many books and articles in refereed journals, including Journal of International Financial Markets, Institutions & Money, Nature Scientific Report, Managerial Finance, PlosOne, The European Journal of Finance, and the Journal of Economic Dynamics and Control Catalina Gálvez is Associate Professor of Economics at the University of the Basque Country, in Bilbao, Spain Her research interests are in the Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:22:35PM via free access x Financialisation and the financial and economic crises areas of urban and regional developments, macroeconomic policy and labour markets She has published a number of articles on those topics in edited books and in refereed journals such as Tourism Economics, Panoeconomicus, and Corporations, among others Carmen Gomez is Associate Professor of Economics at the University of the Basque Country, in Bilbao, Spain Her research interests are in the areas of macroeconomic policy, labour market and international economy She has published a number of articles on those topics in edited books and in refereed journals such as American Journal of Economics and Sociology, Economic and Industrial Democracy, Journal of Economic Issues, Journal of Post Keynesian Economics, Panoeconomicus, and Transnational Corporations, among others Ana González is Associate Professor of Economics at the University of the Basque Country, in Bilbao, Spain Her research interests are in the areas of macroeconomic policy, labour markets and urban and regional development She has published a number of articles on those topics in edited books and in refereed journals such as Tourism Economics, and Panoeconomicus, among others Eckhard Hein is Professor of Economics at the Berlin School of Economics and Law, Co-­Director of the Institute for International Political Economy Berlin (IPE), member of the coordination committee of the Research Network Macroeconomics and Macroeconomic Policies (FMM), and managing co-­editor of the European Journal of Economics and Economic Policies: Intervention His research focuses on money, financial systems, distribution and growth, European economic policies and post-­Keynesian macroeconomics His latest books are The Macroeconomics of Finance-­ dominated Capitalism – and its Crisis (Edward Elgar 2012) and Distribution and Growth after Keynes: A Post-­Keynesian Guide (Edward Elgar 2014) He is the coordinator of Work Package ‘Causes and Consequences of the Financial Crisis’ of the FESSUD project Egert Juuse is a PhD student and Junior Research Fellow at Ragnar Nurkse School of Innovation and Governance (the Chair of Innovation Policy and Technology Governance), Tallinn University of Technology, Estonia His main research areas are financing of economic development, financial and innovation policies in catching-­up economies, especially in Central and Eastern Europe He has been involved in several national research projects, e.g Public Administration and Development in Small States; Innovation Policies and Uneven Development Currently, he is involved in the 7th EU Framework Programme FESSUD: Financialization, Economy, Society and Sustainable Development (2011–2016) Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:22:35PM via free access Contributors ­xi Elif Karaỗimen is Assistant Professor of Economics in the Department of Economics at Recep Tayyip Erdogan University, Turkey Her research interests include the political economy of banking and credit, financialisation in emerging capitalist economies and household debt She has published articles in Cambridge Journal of Economics and Review of Radical Political Economy She obtained her BS in economics from the Middle East Technical University, and her PhD in economics from SOAS London Ahmet Haşim Köse is Professor in the Department of Economics, Faculty of Political Sciences, at Ankara University His research interests are political economy and development economics He has published books and articles on the political economy of Turkey, labour markets and income distribution He has co-ưauthored a book with Fikret enses and Erinỗ Yeldan, Neoliberal Globalization as New Imperialism: Case Studies on Reconstruction of the Periphery (Nova Publisher 2007) Sérgio Lagoa is Assistant Professor at Instituto Universitário de Lisboa (ISCTE-­ IUL) and a researcher at DINÂMIA’CET-­ IUL His research interests and publications are in macroeconomics, monetary economics and labour economics He has recent publications in Open Economies Review, Research in Economics, Economic and Industrial Democracy, and Economics and Labour Relations Review Emanuel Leão holds a PhD in Economics from the University of York He is Assistant Professor at ISCTE-­University Institute of Lisbon and a researcher at DINÂMIA’CET-­IUL His research interests are in the areas of banking, financial markets, public finance and monetary policy His main published articles have appeared in the Journal of Economics and Economic Modelling John Lepper, BA, MSc, PhD, is Adjunct Professor at the Alfred Deakin Research Institute of Deakin University He was a member of the Government Economic Service in the UK advising predominantly on telecommunications and broadcasting matters He worked on secondment as Senior Adviser at the National Lottery Commission and Research Fellow at the Institute of Advanced Studies at Lancaster University He was previously Interim Head of Performance and Analysis and Economic Advisor in the Department for Culture, Media and Sport principally on gambling economics His previous experience includes economic policy advice to the Deputy Prime Minister of New Zealand where he worked on the Gambling Act 2003 He has also been a director of a private economics consultancy, a senior economic adviser in the finance industry in both London and New  Zealand and a teacher of economics at a number of universities in the UK, New Zealand and China Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:22:35PM via free access xii Financialisation and the financial and economic crises Özgür Orhangazi is Associate Professor of Economics at Kadir Has University in Istanbul He is the author of Financialization and the US Economy (2008) and numerous articles and book chapters on financialisation, financial crises, and alternative economic policies He holds a PhD from the University of Massachusetts Amherst (2006) and previously taught economics at Roosevelt University in Chicago (20062011) Gửkỗer ệzgỹr is an Associate Professor at Hacettepe University, Ankara, Turkey He obtained his PhD in Economics at University of Utah in 2006 His research interests are in money and macroeconomic theory Ricardo Paes Mamede is Assistant Professor of Political Economy at ISCTE  – University Institute of Lisbon and a researcher at ­Dinâmia’CET-­IUL since 1999 Between 2008 and 2014 he also coordinated the Research and Evaluation Department at the NSRF Observatory, the government agency responsible for monitoring the use of EU structural funds in Portugal during the period 2007–2013 In 2007 and 2008 he was Head of Unit of Economic Analysis at the Research Bureau of the Portuguese Ministry of the Economy and Innovation He has a PhD in Economics from Bocconi University (Italy) and a Master in Economics and Management of Science and Technology from ISEG/University of Lisbon His research interests are in the fields of innovation and industry dynamics, structural change, European integration, and public policies In 2014 he co-­edited (with Aurora Teixeira and Ester Silva) the book Structural Change, Competitiveness and Industrial Policy: Painful Lessons from the European Periphery (Routledge) Mimoza Shabani obtained her PhD from SOAS, University of London, in December 2014. She is currently Lecturer in Financial Economics at the University of East London in the Department of Finance, Economics and Risk Alexis Stenfors is Senior Lecturer in Economics and Finance at Portsmouth Business School He holds a Civilekonom degree and an MSc from the Stockholm School of Economics, a CEMS-­Master from the Community of European Management Schools and a PhD in Economics from SOAS, University of London Having previously worked 15 years in the foreign exchange and interest rate derivatives markets at various global banks, his research mainly focuses on issues relating to financial markets and political economy His recent research has been published in journals such as the Journal of International Financial Markets, Institutions & Money and the Review of Political Economy Alexis has also been working on behalf of the University of Leeds within the project ‘Financialisation, Economy, Society, and Sustainable Development’ (FESSUD) Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:22:35PM via free access 320 Financialisation and the financial and economic crises continental enlargement versus Atlantic opening’, Panoeconomicus, 5, Special Issue, 543–569 Onaran, Ö (2011), ‘The crisis in Western and Eastern EU: does the policy reaction address its origin’, in P Arestis, R Sobreiro and J L Oreiro (eds), An Assessment of the Global Impact of the Financial Crisis, Basingstoke: Palgrave Macmillan Perraton, J (2011), ‘Crisis in the Euro zone’, in P Arestis, R Sobreiro and J. L. Oreiro (eds), An Assessment of the Global Impact of the Financial Crisis, Basingstoke: Palgrave Macmillan Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:14:49PM via University of Melbourne Index accumulation asset, in UK 80–81, 87 capital, in Estonia 138 debt, in debt-led consumption boom countries 194 debt, in Hungary 30–31 fiscal deficits, in Greece 131–2 liabilities, in Turkey 277–8, 280, 293 adjustment programme in Greece 120, 129, 133–4 in Portugal 270–71 balance of payments deficits, in Spain 109 in EU member states effects of recession on 310–11 method of analysis 300 in France 225–7 as transmission channel 31 balance on current transactions see current account balances Bank of England 21, 69, 72, 76–7, 84–6 Banking Act 1933 44–5 Banking the Globe 72–5 banks/banking in Estonia 9, 139, 149–55 in France effects of financialisation on 218 government support to 229–30 and housing market 218 internationalisation of 217 lending, as transmission channel 227–8 in Germany 174, 176, 182–3, 185, 217 in Greece 125, 127, 129–30, 133 ‘originate and distribute’ strategies 3, 85, 174 in Portugal 257–8, 264–5, 268–9, 271–2 in Spain 90, 98, 107–11 in Sweden 205–7, 210 three pillar system 185 in Turkey 276–7, 280–81, 285, 287–8, 291, 293–4 in UK 68–73, 75–9, 84–7 in USA 49–53, 60–61, 63–5, 84 Central and Eastern European countries (CEECs) 30, 137, 148, 156 Clinton, Bill 45, 47 collateralised debt obligations (CDOs) 50, 65 consumption in Estonia 9, 22, 139–40 fixed capital 143, 150 in France 17, 33, 219 in Germany 174–7, 186–7 in Italy collapse of 251–2 and wealth 246–9 in Portugal 33 in South Africa 22 in theoretical and conceptual framework in Turkey 276, 278, 283–6, 289, 291, 293–4 in UK 77–8 in USA 44, 48, 57–8 see also debt-financed consumption; government consumption; household consumption; private consumption; public consumption; wealth-based consumption contagion 18 in catching-up domestic demand-led countries 31 in debt-led private demand boom countries 21–3, 31 321 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne 322 Financialisation and the financial and economic crises effects of sovereign debt crisis 90, 110 in export-led mercantilist countries 25–7 Germany exposed to 25–7, 187 in Turkey 31, 282 in UK 21, 23 factors ensuring prevalence 85 as systemic impact 78–80 corporate finance (UK) 71 corporate financialisation (UK) 72–5 credit default swaps (CDS) 51, 206–7 current account balances in Estonia 21, 35, 139–41, 148, 151–2, 154–5 in EU member states effects of recession on 310–11 method of analysis 300 in Germany 34, 177–80, 187 in Greece 21, 34–5, 125–9, 133–4, 266 in Hungary 15, 28, 34, 36 in Italy 32, 34–5, 250–51 in Portugal 32, 34, 266–8, 270–71 in Spain effects of financialisation on 108–9, 112, 266 in financialisation era 97–8 in Sweden 27, 34–5, 37, 201–5 in theoretical and conceptual framework 3–4 in Turkey 28–9, 34, 36, 275–8, 281, 288–90, 293–4 in UK 21, 34–5 in USA, before and after financial and economic crises 21, 34–8 debt-financed consumption in France 17 in Germany 174 in Italy 246 in Turkey 277 debt-led private demand boom countries developments preceding crises 6–10 effects of crises 19–24, 37 regime, in theoretical and conceptual framework deleveraging process in Estonia 155 in Greece 118, 122–3 postponing recovery 23 in Spain 22, 90–91, 98, 108, 110 in UK 85–6 deregulation of financial system, in Portugal 257, 264–5 of labour market in Germany 171, 175, 186–7 in Italy 239, 242–3 in Turkey 275 leading to expansion of financial sector, in USA 44, 63–4 process, in Sweden 192–3, 197, 200–203, 210 UK’s business strategies in response to 70–78 Dodd-Frank Act 63, 65 domestic demand-led countries developments preceding crises 12–13 catching-up countries 13–15 mature countries 16–18 effects of crises catching-up countries 27–31, 37–8 mature countries 31–4, 37–8 regime, in theoretical and conceptual framework domestic financialisation in Turkey 276 in UK 75–8 downsize and distribute approach 144–5, 147 economic activity domestic, in Turkey 289–90 in European Union member states effects of recession on 301–4 methods of analysis 299–300 in Portugal 270–71 of Spain, in financialisation era 91–9 economic Darwinism 156 economic growth contours of, in USA 46–9, 64–5 in France 214–16, 224, 231–2 in Germany 164–7 in Greece 117, 123, 129, 132 impact of financial crisis, in Italy 251–2 model of in Estonia 137–42 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne Index ­323 in Italy 235–8 in Spain 92–9 in Portugal 256–60, 265 in Turkey and effects of financial crisis 290–93 and financial flows driven cycles 277–82 economic policy responses 18 of Estonia 156 of Germany 170–71, 183–7 of Greece 23–4, 35, 132–4 of Italy 33–5 of Portugal 33–5 re-thinking 38 of Spain 23–4 of Sweden 203–4, 208–9 of Turkey 282 of UK 21 of USA 21, 62–3 Efficient Markets Hypothesis (EMH) 71 EMU-6 countries components 300 current account balances 310–11 economic activity 301–4, 319 financial balance sheets 312–18 income distribution 307–9 inflation 309 labour markets 304–7 public finances 311–12 EMU-8 countries 319 EMU-11 countries components 300 current account balances 310–11 economic activity 301–4, 319 financial balance sheets 312–18 income distribution 307–9 inflation 309 labour markets 304–7 public finances 311–12 Estonia contagion 23 current account balances 21, 35, 139–41, 148, 151–2, 154–5 as debt-led private demand boom country 5, 139–41 economic development model 137–42 economic policy 156 extensive use of foreign savings 139–41, 154 financial crisis (2008) 154–6 household consumption 151–4 impact of crises 19, 35 income distribution development of functional 142–4 fiscal and monetary policies 145–7 general trend 142 labour unions 144 privatisation, technological change and FDI 144–5 investment in capital stock 147–8 investment financing 148–51 movement towards export-led mercantilism 24, 37 Ponzi financing system 155 real GDP growth and growth contributions 7, 19–21 sectoral financial balances 6, 19–20 transition process transmission channels 22–3 see also EMU-6 countries EU-10 countries components 300 current account balances 310–11 economic activity 301–4, 319 financial balance sheets 312–18 income distribution 307–9 inflation 309 labour markets 304–7 public finances 311–12 euro crisis countries affected by 19, 22, 31, 33–5, 252 export-led mercantilist development contributing to 185, 187 public sector deficits leading to 23–4 safe havens during 26–7 severe consequences of 252 within succession of crises European Central Bank (ECB) 26, 183–4, 259–60, 268, 270, 309 European Union member states economic variables 299–300 groupings 300–301 impact of crises on current account balances 310–11 on economic activity 301–4 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne 324 Financialisation and the financial and economic crises on financial balance sheets 312–18 on income distribution 307–9 on inflation 309 on labour markets 304–7 marked differences between states 318–19 on public finances 311–12 exchange rate appreciation periods in Portugal 260, 267 in Turkey 14 export-led mercantilist countries developments preceding crises 10–12 effects of crises 24–7, 36–7 regime, in theoretical and conceptual framework 4–5 FDI see foreign direct investment Federal Reserve expansionary policies 64 Financial Accounts 55–8 flexible interpretation of Banking Act 45 foreign exchange swap lines 209 injecting reserves into banking system 51 quantitative easing (QE) 62–3 sharp reduction in interest rates 8, 43, 47 finance-led capitalism contours of economic growth 46–9, 64–5 dynamics of financial crisis 49–53 financialisation and crises, as crisis of bailout of financial sector 182–3 macroeconomic policies and crisis recovery 183–6 in Portugal 268–71 transmission of crisis to Germany 180–82, 187 macroeconomic developments in age of household consumption 57–8, 65 income distribution 53–5, 64 international payments 59–60 investment expenditure 55–7, 64–5 unit labour costs and international competitiveness 58–9 origins and impact banking and financial liberalisation 44–5, 65 characterised by weakening in position of labour 44, 63–4 financial sector expansion 45–6, 65 financial and economic crises as crisis of finance-led capitalism in Germany 180–87 in Portugal 268–71 developments preceding in debt-led private demand boom countries 6–10 in domestic demand-led countries 12–18 in export-led mercantilist countries 10–12 dynamics of, in USA 49–53 effects of (contagion, transmission and economic policy responses) 18–19 on current account balances 34–8 in debt-led private demand boom countries 19–24, 37 in domestic demand-led countries 27–34, 37–8 in export-led mercantilist countries 24–7, 36–7 in Estonia (2008) 154–6 and financialisation, in Greece 129–34 impact of, in Italy 251–2 impact on EU member states 301–19 succession of in Sweden 205–11 transmission channels, in Spain 109–11 in Turkey 290–94 in UK (2007-2008) 84–6 financial balance sheets of economic sectors in Spain 94–9 in EU member states impact of recession on 312–18 methods of analysis 300 growth, in Turkey 276 financial institutions bailout of, in Germany 182–3 public support to troubled 313–15 in Spain Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne Index ­325 financial assets 96 financial expansion and decline 97–8 increase in financial liabilities 90–91, 95 in UK facing significant change 70 interdependence and contagion 78–80 lack of regulation 76–7 provision of mortgage loans 75 response to financial crisis 85 to support investment 87 types of 76 in USA 45, 49, 52, 62, 65 financial sector deleveraging process, in Spain 90–91 in Estonia 138–9 expansion, in USA 45–6 in Germany bailout of 182–3 important changes 164 successful containment of crisis 185 in Italy as resilient 251 shift in structural output composition to 239 strong recovery of profit share of 241 providing high wage employment, in UK 82 size of in EU 318 in Spain 89–90 in Turkey increasing transfers of household income to 284 limited in mobilizing funds 287–8 measures 292–3 financial transactions, as international transmission channels 60–61 financialisation in Estonia effects of 142–54 and financial crisis (2008) 154–6 process of 139–42 in France and economic and financial crises 227–31 effects of 218–27 long-run development in era of 217–18 in Germany effects of 167–80, 186–7 and financial and economic crises 180–86 long-run development in era of 164–7 in Greece effects of 119–29 and financial crisis 129–34 long-run development in era of 115–18 in Italy effects of 238–51 long-run development in era of 234–8 no consensus on definition of 114 in Portugal and economic performance 256–60 effects of 260–68 and financial and economic crises 268–71 in Spain economic activity in era of 91–9 effects of 99–109 process of 89–91, 111 in Sweden effects of 196–205 and global financial crisis 205–11 process of 192–6 theoretical and conceptual framework consumption current account balances 3–4 debt-led private demand boom regime 4, 36 domestic demand-led regime 5, 36 export-led mercantilist regime 4–5, 36 income distribution investment in capital stock 2–3 in Turkey 283–8 in UK corporate 72–5 domestic 75–8 limiting constraints 87 systemic impacts of 78–86 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne 326 Financialisation and the financial and economic crises fiscal policy in Estonia 145–7 European 214 in France 230–31 in Germany 183–6 in Greece 127 in Portugal 259 in Spain 110–11 in Sweden 202–4, 210 in Turkey 280, 292 in USA 46–7, 214 foreign direct investment in Estonia 9, 138–9, 144–5, 148, 154 in Germany 173–4 in Greece 131 in Hungary 15 in Portugal 257 in Spain 101 in Sweden 207 in USA 59 foreign trade in France 17, 224–5 in Germany 171 in Turkey 277, 289 France annual growth rates of real unit labour costs 226 corporate income, productive investments and their financing 220–23 current account balances 32, 34 economic growth 214–16, 224, 231–2 financialisation and economic and financial crises 227–31 effects of 218–27 long-run development in era of 217–18 foreign trade and balance of payments 224–7 government support to banks 229–30 household income and expenditure 223–4 impact of crisis 31, 33, 35 macroeconomic 230–31 income distribution 17, 219–20 labour income share 167 as mature domestic demand-led country 12, 216, 218, 232 movement towards export-led mercantilism 37, 218 poverty 220 real GDP growth and growth contributions 16–17, 31–3 sectoral financial balances 16, 32 transmission channels 227–9, 232 see also EMU-11 countries ‘frightened worker effect’ 44 FSA (Financial Services Authority) 76–7 Germany annual growth rates of real unit labour costs 226 consumption debt-financed 174 household 174–5, 186–7 private 165–6, 175, 180–81, 184 public 165 wealth-based consumption 174–7 contagion in 25–7, 187 current account balances 34, 177–80, 187 ‘debt brakes’ 38, 185–7 economic policy 170–71, 183–7 as export-led mercantilist country 5, 163, 166–7, 177, 185–7 financial corporate sector 2, 168–9 financial sector bailout 182–3 financialisation effects of 167–80, 186–7 and financial and economic crises 180–86 long-run development in era of 164–7 impact of crises 25–6 income distribution 167–72, 186 investment in capital stock 172–4, 178–9, 186 labour income share 167–9, 175 non-price competitiveness 178–80, 187 real GDP growth and growth contributions 11, 24–6 reasons for quick recovery from crises 26–7, 36, 180, 183–7 safe haven effect 26–7 sectoral financial balances 10, 25, 166 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne Index ­327 study overview 163 top management salaries 2, 169–70 transmission channels 25–6, 36, 180–82, 187 see also EMU-11 countries government consumption in France 219 in Sweden 195, 201 in USA 48 Great Recession development of trade cycles 18–19, 164–5, 235 France’s position leading up to 17 German economy preceding 164–80, 186–7 impact on EU member states balance on current transactions 310–11 economic activity 301–4 financial balance sheets 312–18 income distribution 307–8 inflation 309 labour markets 304–7 methods of analysis and groupings 299–301 new euro countries 318–19 public finances 311–12 quick recovery from 24–5 within succession of crises Greece annual growth rates of real unit labour costs 226 capital flows translated to public debt 131–2 contagion 23, 31 current account balances 21, 34–5, 125–9, 133–4, 266 as debt-led private demand boom country debt of non-financial corporations 259 economic policy 23–4, 35, 132–4 finance unleashed 114 financialisation effects on economy 119–29 and financial crisis 129–34 long-run development in era of 115–18 general government 117–18, 120, 129–31 household consumption 123–5 impact of crises 19, 22–3, 35 income distribution 9, 119–21 investment in capital stock 121–3 labour income share 167 movement towards export-led mercantilism 24, 35, 37 real GDP growth and growth contributions 7–8, 19–21 sectoral financial balances 6, 20, 118 transmission channels 23, 31, 129–30 see also EMU-6 countries gross capital formation (GCF) 91, 93–4, 103, 112, 179 gross fixed capital formation (GFCF) in Estonia 150–51 in Germany 179, 181 in Italy 195 in Portugal 256, 262–3 in Sweden 195 in Turkey 287 in UK 80–81 house prices in Germany 176 in Portugal 268–9 in South Africa 7, 10 in Sweden 200–201 in UK 77, 86–7, 268 in USA 8, 48, 50–51, 64, 268 household consumption in Estonia 151–4 in France 216, 219, 223–4, 228 in Germany 174–5, 186–7 in Greece 123–5 in Hungary 15 in Portugal 264–5, 271 in South Africa 9–10 in Spain effects of financialisation on 107–8, 111 in financialisation era 91, 93–9 in Sweden 196–201 in Turkey 283–6 in USA 57–8, 65 Hungary as catching-up domestic demand-led country cautionary note for 37 comparison with Poland 30 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne 328 Financialisation and the financial and economic crises current account balances 15, 28, 34, 36 dependent on foreign financial inflows 14 effects of crisis 30–31 government responses to crisis 31 main forces driving growth 15 movement towards export-led mercantilism 36 real GDP growth and growth contributions 13–14, 27–9 residential investment 15 sectoral financial balances 13–14, 28 wage share in 15 see also EU-10 countries income distribution in Estonia development of functional 142–4 fiscal and monetary policies 145–7 general trend 142 labour unions 144 privatisation, technological change and FDI 144–5 in EU member states effects of recession on 307–8 methods of analysis 300 in France 17, 219–20, 223–4 in Germany 167–72, 186 in Greece 9, 119–21 in Italy 238–42, 246–9, 251 Kaleckian theory of 2, 168 in Portugal 260–262, 271 in Spain 99–103, 112 in theoretical and conceptual framework in Turkey 282–3, 293 in UK 81–3 in USA 53–5, 64 inflation effects of recession on, in EU member states 309 method of analysis 300 interdependence (UK) 78–80 internal means of finance channel 3, 121–2, 172–4, 186, 244–5, 272 international competitiveness (USA) 58–9 international payments (USA) 59–60 international trade Germany’s exposure to channel 187 as international transmission channel 61 making negative contribution to US growth 64 international transmission financial transactions 60–61 international trade 61 investment in capital stock, theory and concept 2–3 in debt-led private demand boom countries 7, 20–21 in domestic demand-led countries 13–14, 16–17, 29, 32–4 in Estonia in capital stock 147–51 financing 148–51 weakening 22 in export-led mercantilist countries 11, 26 in France 220–24, 227–8, 231–2 in Germany in capital stock 172–4, 178–9, 186 as driver of recovery 180 international 177 of non-financial corporations 164 public 184 in Greece in capital stock 121–3 gross 116–17 private 116–17, 132 public 115 in Italy in capital stock 235, 242–5 collapse of 238, 251 growth contribution of 17 household 247 private 234, 237 and profits 237 in Portugal in capital stock 262–4 corporate 271–2 cuts in public 270 dynamics 256–7 household 269, 271 income, outflow of 267 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne Index ­329 in Spain in financialisation era 94 international 109 of non-financial corporations 103–6, 112 in Turkey in capital stock 286–8 contribution to GDP growth 29, 280 economic indicator 278 expenditures 280, 291, 293 foreign 276 imported goods 289–90 stagnant, low 276 in UK fixed 71–2, 80–81, 87 precarious 73–4, 87 in USA banks 50–52 collapse 43–4 expenditure 55–7, 64–5 fixed 42, 44, 47–8, 55, 64–5 international 60 private 48–9, 55 Italy annual growth rates of real unit labour costs 226 current account balances 32, 34–5, 250–51 economic policy 33–5 financialisation effects of 238–51 long-run development in era of 234–8 impact of financial crisis 31, 33, 35, 251–2 income distribution 238–42, 246–9, 251 investment in capital stock 235, 242–5 labour income share 167 as mature domestic demand-led country 12, 235, 238, 250–51 movement towards export-led mercantilism 34–5, 37 real GDP growth and growth contributions 16–17, 31–2, 235–6 sectoral financial balances 16, 32 wealth and consumption 246–9 see also EMU-11 countries Japan current account balances 11–12, 34–5, 37 double-dip recession 25 as export-led mercantilist country labour income share 167 real GDP growth and growth contributions 11–12, 24–6 sectoral financial balances 10, 25 transmission channels 26 wage share in 12 as weakly export-led mercantilist country 4–5, 27, 35, 37 labour markets deregulation in Germany 171, 175, 186–7 in Italy 239, 242–3 in Turkey 275 effect of recession on, in EU member states 304–7 methods of analysis 300 labour unions in Estonia 144, 146 in UK see also trade unions Lehman Brothers 51, 79, 84 liquidity and funding channel, in Estonia 22–3, 155–6 in Portugal offered by ECB 268 reduction of constraints 265 tightening conditions, in Turkey 293 in UK during 1980s 71–2 during 2007-2008 financial crisis 84–6 regulation of 87 systemic risk 78–81 merger and acquisition activity in UK 72–4, 86 in USA 8, 47–8, 55, 64 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne 330 Financialisation and the financial and economic crises MNCs (multinational companies) in Estonia 138 in Portugal 260 in UK banks redirecting lending to 72 business directed at helping nonfinancial 71 financial subsidiaries of, becoming dominant source of company profits 73 international capital movements dominated by 70 monetary policy autonomy 37 in Estonia 145–7 Euro area-wide 183–4, 259 shocks, in France 214–15 in Sweden 193, 206–9 in Turkey 280, 292 in UK Bank of England and FSA 76–7 changes in, and impact of 69–70 directions for future development 69 features of 68–9 government responses 69 money markets (Sweden) 205–7 mortgage backed securities (MBS) 50, 62–3, 85 My Bank era 75–8 ‘new economy’ crisis 175–6 new euro countries, impact of Great Recession on 318–19 NFCs see non-financial corporations non-financial corporations in Estonia 148–9 in European Union member states 316–17 and financialisation in France 218, 228 in Germany 172–4 in Greece 118, 121–3 in Italy 240–41, 243–5 in Portugal 255, 257–60, 262–4, 267 in Spain 90, 95–9, 103–6, 111–12 in Turkey 276, 280, 286–8, 293 in UK 71, 73 in USA 46–7, 55–6 Northern Rock 79, 85 Obama, Barack 62–3 Poland as catching-up domestic demand-led country 12 cautionary note for 37 comparison with Hungary and Turkey 30 current account balances 28–9, 34, 36 impact of crises 30 real GDP growth and growth contributions 13–14, 27–9 sectoral financial balances 13–14, 28 transition process 15 wage share in 15 see also EU-10 countries Portugal annual growth rates of real unit labour costs 226 and consumption 256, 264–5, 269, 271–2 current account balances 32, 34, 266–8, 270–71 economic policy responses to crisis 33–5 financial system evolution 255 financialisation and economic and financial crises 268–71 and economic performance 256–60 effects of 260–68 impact of crises 31, 33–4 income distribution 260–62, 271 investment in capital stock 262–4 labour income share 167 as mature domestic demand-led country 12 movement towards export-led mercantilism 37 real GDP growth and growth contributions 16–17, 31–2 sectoral financial balances 16, 32 see also EMU-11 countries poverty 220 preference channel see internal means of finance channel Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne Index ­331 private consumption in debt-led consumption boom regime in debt-led private demand boom countries 6–7, 20–21 deficit-financed 12 in domestic demand-led regime 5, 13–14, 16–17, 29, 32 in Estonia 140, 156 and euro crisis 34 in export-led mercantilist countries 11, 26 in Germany 165–6, 175, 180–81, 184 in Greece 115–18 in Italy 17, 235–6 in Poland 29–30 in Portugal 256, 264–5, 269, 272 in Spain 93, 98 in Sweden 25, 194–5 in Turkey 15, 29, 280, 283–4, 293 privatisation in Estonia 9, 137, 144–5, 147 in Italy 235 in Poland 15 policy, in Greece 132 in Portugal 17, 257, 265 in Sweden 193, 199, 203 public consumption in debt-led private demand boom countries 20–21 in domestic demand-led countries 13–14, 16–17, 29, 32 in Estonia 140 in export-led mercantilist countries 11, 26 in France 32, 228 in Germany 165 in Greece 115–16 in Italy 236 in Portugal 256 in Spain 91, 93–8 in USA 48 public finances effects of recession on, in EU member states 311–12 methods of analysis 300 quantitative easing (QE) 62–3, 84 Reagan, Ronald 8, 44–7, 214 real economy in France 214, 221, 227, 229–31 in Greece 23, 114, 119–30, 134 and sovereign debt, in Sweden 207–8 safe haven effect 27 securities in Greece 123–5, 133 in Italy 245, 247–8 mortgage-based 44, 49–51, 62–3 in Turkey 276, 285–6 in UK 69, 72–7, 84–6 shareholder value orientation 3, 147–8, 169, 172–4, 286 South Africa benefiting from growth through foreign capital inflows 289 current account balances 21, 34 as debt-led private demand boom country house prices in 7, 10 impact of crises 22 movement towards domestic demand-led growth 24, 37 real GDP growth and growth contributions 7, 9–10, 19–21 sectoral financial balances 6–7, 20 wage share in 10 sovereign debt consequences, in Italy 252 crisis, in Spain 22, 90, 110 interest rate, in France 230 restructuring, in Greece 315 in Sweden and current account 201–5 and real economy 207–8 Spain annual growth rates of real unit labour costs 226 contagion 23 current account balances 97–8, 108–9, 112, 266 as debt-led private demand boom country economic activity changes in GDP composition 91 current financial and economic crisis 94 model of economic growth 92–9 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne 332 Financialisation and the financial and economic crises three different phases 91 trade flows 91–2 type of long-run economic growth 94–9 economic policy 23–4 financial assets and liabilities 96–7, 107–8 financialisation economic activity in era of 91–9 effects of 99–109 process of economy 89–91, 111 household consumption 107–8, 111 income distribution 99–103, 112 investment 103–6, 112 labour income share 167 movement towards export-led mercantilism 24, 37, 99 real GDP growth rates 251 sectoral financial balances transmission channels 109–11 see also EMU-11 countries ‘stagnation policies’ 37 structured investment vehicles (SIVs) 50 subprime mortgages mechanisms of 49–51 as onset of financial crisis 49, 227 Portugal impact on 268–9 lack of involvement in 33, 268 Sweden’s lack of involvement in 26–7 sudden stops of capital inflows 14, 18, 38, 280 Sweden annual growth rates of real unit labour costs 226 current account balances 27, 34–5, 37, 201–5 economic and monetary policies 203–4, 208–9 as export-led mercantilist country 5, 192, 194–6, 201, 203, 210 weakly 4–5, 27, 35, 37 featuring elements of domestic demand-led development 12 financialisation effects of 196–205 and global financial crisis 205–11 process of 192–6 household consumption 196–201 impact of crises 26–7 labour income share 167 money markets and banking system 205–7, 210 movement towards export-led mercantilism 192 poverty 220 real GDP growth and growth contributions 11–12, 24–6, 195 reasons for quick recovery 25, 27, 36, 205 safe haven benefiting from 27 factors playing role in portrayal as 207 seen as 193, 210 sectoral financial balances 10, 25, 196 sovereign debt and current account 201–5 and real economy 207–8 transmission channels 26–7, 36, 205–9 see also EU-10 countries tax policies in Estonia 138, 145–7, 149, 156–7 in France 214, 231 in Germany 164, 168, 184 in Greece 130, 132, 134 in Italy 33, 250–51 in Portugal 270 in Spain 111 in Sweden 193–4, 200, 202–4 in Turkey 30 in USA 46–8, 56, 62 technological change (Estonia) 144–5 ‘toxic’ financial products 22–3, 129, 268, 292, 294 trade cycles beginning and ending of 38 comparison in German economy 164–5, 167, 175, 187 in Italian economy 235–6 during crises 18–20, 25–9, 32 pre-crises 5–18 in Spain 91–2 trade unions Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne Index ­333 falling bargaining power of 2, 8, 169–72 in Italy 242 see also labour unions transmission channels 18 in catching-up domestic demand-led countries 29, 31 in debt-led private demand boom countries 21–3, 31 into Estonia 22–3 in export-led mercantilist countries 25–7, 36–7 into France 227–9, 232 into Germany 25–6, 36, 180–82, 187 into Greece 23, 31, 129–30 international, from USA financial transactions 60–61 international trade 61 into Japan 26 into Spain 109–11 into Sweden 26–7, 36, 205–9 into Turkey 29–30 Troubled Assets Relief Programme 52 Turkey as catching-up domestic demand-led country 12 cautionary note for 37 comparison with Poland 30 consumption 276, 278, 283–6, 289, 291, 293–4 contagion in 31, 282 current account balances 28–9, 34, 36, 275–8, 281, 288–90, 293–4 dependent on foreign financial inflows 14 economic policy 282 economy, and financial crisis 290–94 effect of neoliberal economic policies 275 financialisation 283–8 government responses to crisis 31 growth pattern and financial flows driven cycles 277–82 income distribution 282–3, 293 investment in capital stock 286–8 real GDP growth and growth contributions 13–14, 27–9, 278–9 sectoral financial balances 13–14, 28 showing features of debt-led private demand boom development 14–15, 36 transmission channels 29–30 UK (United Kingdom) annual growth rates of real unit labour costs 226 contagion in 21, 23 factors ensuring prevalence 85 as systemic impact 78–80 current account balances 21, 34–5 as debt-led private demand boom country economic policy 21 as highly-financialised country 238, 251 income inequality 8–9 labour income share 167–8 movement towards domestic demand-led growth 24, 37 policy background 68–70 real GDP growth and growth contributions 7–9, 19–21 sectoral financial balances 6, 20 state engagement less pronounced 199 strategic response to deregulation 70–72 corporate financialisation 72–5 domestic financialisation 75–8 systemic impacts of financialisation accumulation 80–81 financial crisis (2007-2008) 84–6 income distribution 81–3 interdependence and contagion 78–80 limiting constraints 87 see also EU-10 countries unit labour costs in EU member states 305–7 in France 226–7 in Germany 179, 181 in Greece 127–8, 133 in Spain 109 in Sweden 194–5, 205 in USA 58–9 USA (United States of America) contagion from 23, 26 Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne 334 Financialisation and the financial and economic crises as country of origin of financial crisis 21, 23 current account balances 21, 34–8 as debt-led private demand boom country economic policy responses to crisis 21, 62–3 finance-led capitalism in contours of economic growth 46–9, 64–5 dynamics of financial crisis 49–53 macroeconomic developments in age of 53–60 origins and impact 44–6, 63–4 as highly-financialised country 238, 251 historical economic overview 42–4 international transmission of crisis financial transactions 60–61 international trade 61 labour income share 167–8 movement towards domestic demand-led growth 24 real GDP growth and growth contributions 7–8, 19–21 sectoral financial balances 6, 20 state engagement less pronounced 199 Volcker, Paul 43, 63 wage share in Estonia 9, 143–4, 147 in EU member states 307–8 in Germany 11, 164, 169–70, 175 in Greece 9, 120, 123 in Hungary 15 in Italy 17, 239–42 in Japan 12 methods of calculation 38, 295 in Poland 15 in Portugal 257, 261 in South Africa 10 in Spain 9, 99–100 in Sweden 12 in Turkey 15, 279–81, 283, 293–5 in UK in USA wealth-based consumption in Germany 174–7 in Italy 246–7, 249 in USA Eckhard Hein, Daniel Detzer and Nina Dodig - 9781785362378 Downloaded from Elgar Online at 06/05/2016 01:17:10PM via University of Melbourne ... Preface and acknowledgementsxv   1 Financialisation and the financial and economic crises: theoretical framework and empirical analysis for 15 countries Nina Dodig, Eckhard Hein and Daniel Detzer... the Financial and Economic Crises, Edward Elgar 201 5) The present volume contains a selection of 11 (out of 1 5) shortened and revised country studies on financialisation and the financial and economic. .. via free access 1.  Financialisation and the financial and economic crises: theoretical framework and empirical analysis for 15 countries Nina Dodig, Eckhard Hein and Daniel Detzer 1.1 INTRODUCTION