Suchergebnisse

This paper draws an empirical reassessment of the finance-growth nexus by performing a panel data econometric analysis for all 28 European Union countries over 27 years from 1990 to 2016. Since the mid-1980s, the financial system has experienced a strong liberalisation and deregulation by preventing its beneficial effects on the real economy. This phenomenon, typically called financialisation, points to a negative view of finance and contradicts the well-entrenched hypothesis on the finance-growth nexus. We estimate both linear and non-linear growth models by incorporating seven proxies of finance (money supply, domestic credit, financial value added, short-term interest rate, long-term interest rate, stock market volume traded and stock market capitalisation) and five control variables (the lagged growth rate of the real per capita gross domestic product, the inflation rate, the general government consumption, the degree of trade openness and the education level of the population). Our results show that finance has impaired economic growth in the EU countries, both in the pre-crisis period and in the crisis and post-crisis periods. The enormous growth of domestic credit and of the financial value added have been restraining the economic growth of the EU countries since 1990 and particularly up until the Great Recession. This implies the need to reduce the prominence of finance, i.e. so-called de-financialisation, in the coming years in order to avoid the potential new 'secular stagnation' in the current age of financialisation. ; info:eu-repo/semantics/publishedVersion

This paper conducts a time series econometric analysis in order to examine empirically the relationship between the financial system and economic growth in Portugal from 1977 to 2016. The Portuguese financial system has experienced a strong wave of privatisations, liberalisations and deregulations since the adhesion of Portugal to the European Economic Community in 1986, which has not favoured a sustained path of strong economic growth since then. The paper estimates a linear growth model and a non-linear growth model, which includes four proxies for the financial system (money supply, credit, financial value added and stock market capitalisation) and four further control variables (inflation, government consumption, trade openness and education). The paper finds a negative linear relationship between the banking system and Portuguese economic growth, a positive linear relationship between the stock markets and Portuguese economic growth, a concave quadratic relationship between the banking system and Portuguese economic growth, and a convex quadratic relationship between the stock markets and Portuguese economic growth. This suggests that Portuguese policy makers should canalise efforts to decrease the importance of banking system and to increase the importance of stock markets in order to support more robust economic growth in the coming years. ; info:eu-repo/semantics/acceptedVersion

The purpose of this paper is the conduction of a time series econometric analysis in order to examine empirically the relationship between the financial system and economic growth in Portugal from 1977 to 2016. The Portuguese financial system has experienced a strong wave of privatisations, liberalisations and deregulations since the adhesion of Portugal to the European Economic Community in 1986, which has not favoured a sustained path of strong economic growth since then. The growth of the financial system played even a crucial role in the recent sovereign debt crisis in Portugal, casting doubts on the conventional hypothesis on the finance-growth nexus. The paper estimates a linear growth model and a non-linear growth model, which includes four proxies for the financial system (money supply, credit, financial value added and stock market capitalisation) and four further control variables (inflation, government consumption, trade openness and education). The paper finds a negative linear relationship between the banking system and Portuguese economic growth, a positive linear relationship between the stock markets and Portuguese economic growth, a concave quadratic relationship between the banking system and Portuguese economic growth, and a convex quadratic relationship between the stock markets and Portuguese economic growth. This suggests that Portuguese policy makers should canalise efforts to decrease the importance of banking system and to increase the importance of stock markets in order to support more robust economic growth in the coming years. ; FCT

This article presents an empirical analysis of the relationship between financialisation and real investment for non-financial corporations using panel data composed of 27 European Union countries over 19 years (1995 to 2013). On the one hand, financialisation leads to a rise in financial investments, diverting funds from real investments ('crowding out' effect); on the other, pressures from shareholders to intensify financial payments restrict the funds available for new real investments. We estimate an aggregate investment equation with the traditional variables (lagged investment, profitability, debt, cost of capital, corporate savings and output growth) and two further measures of financialisation (financial receipts and financial payments). The findings demonstrate that financialisation has damaged real investment in European Union countries, mainly through the channel of financial payments, either by interest or dividend payments. It is also found that the prejudicial effects of financialisation on investment were more severe in the pre-2007 crisis period. It is concluded that financialisation contributed to a slowdown of real investment by 1 to 8 per cent in the full and pre-crisis period, respectively. During the pre-crisis period, financialisation was the main driver of the slowdown of investment in the European Union. ; info:eu-repo/semantics/acceptedVersion

This paper conducts an empirical analysis of the relationship between financialization and neoliberalism and the labor share using panel data composed of twenty-seven European Union countries over nineteen years (from 1995 to 2013). Adopting a Kaleckian perspective, framed in the post-Keynesian literature, financialization and neoliberalism exert a negative influence on the labor share through three different channels: the change in the sectorial composition of economies (the increasing importance of financial activity and the decreasing importance of general government activity), the proliferation of shareholder value orientation, and the deterioration of general workers' bargaining power. We estimate a labor share equation with the traditional variables (lagged labor share, technological progress, globalization, education, and output growth) and four further measures of financialization and neoliberalism (financial activity, general government activity, shareholder value orientation, and the trade union density rate). The findings show a disruptive relationship between financialization and neoliberalism and the labor share in European Union countries, mainly through the channels of general government activity and shareholder value orientation. It is also found that financialization and neoliberalism have contributed to a fall in the labor share in European Union countries. The technological progress was the main driver of the fall in the labor share in European Union countries, while the output growth was the main supporter. This suggests that the trend of decline in the labor share could intensify in the future taking into account the fears of potential secular stagnation in the current era of financialization and neoliberalism. ; info:eu-repo/semantics/acceptedVersion

This paper draws an empirical reassessment of the finance-growth nexus by performing a panel data econometric analysis for all 28 European Union countries over 27 years from 1990 to 2016. Since the mid-1980s, the financial system has experienced a strong liberalisation and deregulation by preventing its beneficial effects on the real economy. This phenomenon, typically called financialisation, points to a negative view of finance and contradicts the well-entrenched hypothesis on the finance-growth nexus. We estimate both linear and non-linear growth models by incorporating seven proxies of finance (money supply, domestic credit, financial value added, short-term interest rate, long-term interest rate, stock market volume traded and stock market capitalisation) and five control variables (the lagged growth rate of the real per capita gross domestic product, the inflation rate, the general government consumption, the degree of trade openness and the education level of the population). Our results show that finance has impaired economic growth in the EU countries, both in the pre-crisis period and in the crisis and post-crisis periods. The enormous growth of domestic credit and of the financial value added have been restraining the economic growth of the EU countries since 1990 and particularly up until the Great Recession. This implies the need to reduce the prominence of finance, i.e. so-called de-financialisation, in the coming years in order to avoid the potential new 'secular stagnation' in the current age of financialisation. ; FCT

This paper empirically applies the New Keynesian Model to the euro area's economy during the period from the first quarter of 1999 to the last quarter of 2008, which is consistent with the scant empirical evidence on this Dynamic Stochastic General Equilibrium model. The New Keynesian Model is estimated using the Generalized Method of Moments, since the model denote hybrid features including backward and forward looking behaviours by economic agents and elements with rational expectations. Although this method of estimation may present some limitations, the New Keynesian Model seems to describe reasonably well the evolution of economic activity, the inflation rate and monetary policy in the euro area. Against this backdrop, the New Keynesian Model may provide an important tool for aiding the governments of euro area countries and the European Central Bank in the adoption and implementation of its policies over time.

This paper makes an empirical assessment of the relationship between financialisation and real investment by non-financial corporations using panel data composed of 27 European Union countries over 19 years (from 1995 to 2013). On one hand, financialisation leads to a rise in financial investments, deviating funds from real investments ("crowding out" effect). On the other, pressures from shareholders to intensify financial payments restrict the funds available for new real investments. We estimate an aggregate investment equation with the traditional variables (profitability, debt, cost of capital, savings rate and output growth) and two further measures of financialisation (financial receipts and financial payments). Findings show that financialisation has damaged real investment in European Union countries, mainly through the channel of financial payments either in interest or dividend payments. It is also found that the prejudicial effects of financialisation in investment are more marked in more financialised countries. In addition, it is concluded that debt has a harmful effect on real investment as the increasing levels of non-financial corporations' indebtedness prevent the use of new debts to finance real investments. ; FCT

This paper empirically applies the New Keynesian Model to the euro area's economy during the period from the first quarter of 1999 to the last quarter of 2008, which is consistent with the scant empirical evidence on this Dynamic Stochastic General Equilibrium model. Specifically, we proceed with an econometric estimation of the IS Curve, the Phillips Curve and the Taylor Rule to assess the ability of these three equations to describe the dynamics of aggregate demand and the inflation rate in the euro area, as well as monetary policy steering by the European Central Bank during its first 10 years. The New Keynesian Model is estimated using the Generalized Method of Moments, since the three equations denote hybrid features including backward and forward looking behaviours by economic agents and elements with rational expectations. Although this method of estimation may present some limitations, the New Keynesian Model seems to describe reasonably well the evolution of economic activity, the inflation rate and monetary policy in the euro area. Against this backdrop, the New Keynesian Model may provide an important tool for aiding the governments of euro area countries and the European Central Bank in the adoption and implementation of its policies over time. ; FCT

This paper provides an empirical analysis of the relationship between the labour income share and financialisation, as well as other related variables in Portugal from 1978 to 2012. We estimate an equation for the labour share that includes standard variables (technological progress, globalisation, education and business cycle) and variables to capture the effect of financialisation. We formulate the hypothesis that the financialisation process may lead to a rise in the inequality of functional income distribution through three channels: the change in the sectoral composition of the economy (due to both the increase in the weight of financial activity and the decrease in government activity), the diffusion of shareholder value governance practices and the weakening of trade unions. Our results show that the financialisation process has an indirect long-term effect on the labour share through its impact on government activity and trade union density. The paper also finds evidence supporting the traditional explanations for functional income distribution, namely globalisation, education and business cycle. ; info:eu-repo/semantics/acceptedVersion

JEL CLASSIFICATION C22, D33, E25 and E44 ; This paper makes an empirical analysis of the relationship between financialisation and the evolution of labour income share in Portugal from 1978 to 2012. We estimate an equation for the labour income share that includes standard variables (technological progress, globalisation, education and business cycle) and variables to capture the effect of financialisation. We formulate the hypothesis that the financialisation process may lead to a rise in the inequality of functional income distribution through three channels: the change in the sectorial composition of the economy (due to the increase in the weight of the financial activity and the decrease in government activity), the diffusion of shareholder value governance practices and the weakening of trade unions. Our results show that there is a long-term relationship between all variables and that the financialisation process indirectly affects the labour income share through its impact on government activity and trade union density. The paper also finds evidence supporting the traditional explanations for functional income distribution, namely globalisation, education and business cycle. ; FCT