Abstract
Financialisation has adverse effects on living standards, capital accumulation, consumption, productivity, aggregate demand, value added, income distribution, employment, wages, tax revenue, asset price inflation, financial stability, and the opacity and complexity of the financial sector. Under financialisation, adverse effects on the economy are produced by changes in behaviour, including (i) changes in household behaviour, particularly with respect to the accumulation of debt; (ii) changes in the behaviour of non-financial business, such as shareholder value orientation and increased financial activity; and (iii) changes in the financial sector, in particular the emergence of the (hardly regulated) shadow banking sector, a shift towards household credit (rather than business credit) and a shift to investment banking and fee generating business.
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