Financialisation, Financial Crisis and Inequality

Abstract

This chapter outlines how the pace and structure of financialisation have differed over time and across countries, and also how income distribution (inequality of personal income, distribution between wages and profits) has proceeded with different time profiles and structures. This chapter outlines the nature and features of financialisation in the present era, and provides a summary of the main trends in income distribution and inequality over the past three decades. The links between the financial sector and inequality of income and earnings are explored, and specifically the extent of inequality within the financial sector and the degree to which inequality in the financial sector contributes to overall inequality. The evidence on the processes of financialisation and the distribution of income is reviewed. The ways in which financial deepening can impact on inequality and poverty are explored. The links between inequality and financial crisis and household debt are reviewed.