Some Stylized Facts on the Finance-Dominated Accumulation Regime

While there is an agreement that the Fordist accumulation regime came to an end in the course of the 1970s, there is no agreement on how to characterize the post-Fordist regime (or if such is already in place). This paper seeks to put together various arguments related to financialization (in the broad sense) from a macroeconomic point of view and evaluate their relevance by confronting them with the actual development of macroeconomic variables for EU countries. The paper discusses changes in investment behaviour, consumption behaviour and government expenditures, investigating to what extent changes are related to financialization. Households experience higher debt levels. Rising profits of businesses come with only moderate investment. The notion of a ‘finance-dominated’ accumulation regime is proposed to highlight that financial developments crucially shape the pattern and pace of accumulation. The finance-dominated accumulation regime is characterized by mediocre growth performance and a high degree of fragility. However, so far deregulated financial markets have not lead to major financial crises in advanced capitalist economies. A possible reason for this is that the size of the state sector has not been substantially reduced despite neo-liberal attempts to do so.