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The high growth rate in many industrial countries during the first two decades after World War II produced a financial expansion, which in its turn made possible an extension of the growth process. But it also led to a financial crisis, when increasing costs during the 1970s created growing deficits in the balance of payments and the government budgets in many countries.
List of contents
Part 1 Introduction: disequilibrium and uncertainty; stocks and flows in the real and financial parts of the economy; input-output systems; the stocks in the transactions table. Part 2 Production, wages and prices: the development of production in the industrialized world; the production function as a technical relationship; production functions when there are complementarities between labour and capital. Part 3 Factor income distribution: its development in some industrial countries; its role in early business cycle theory; analyses of its role in the business cycle - Kalecki and Joan Robinson; the STAR-model; Kaldor's analysis; structural change and long-run development. Part 4 Sectors expenditure on final goods - short-run and long-run changes in the demand structure: consumption demand; investment demand - the consumption-investment choice, investment decisions by non-financial enterprises, the financing decision by non-financial enterprises. Part 5 Financial flows and stocks: finance in the transactions table; the cyclical development of factor income distribution and asset prices; a Keynesian model for the relation between real and financial development. Part 6 Economic policy and economic growth: financial development during a period of high economic growth - the high liquidity inherited from World War II, monetary policy in a regulated credit market; stagnation and rising disequilibrium - structural change in government expenditure and income. Part 7 Financial stability and growth in an internationalized economy: structural changes in production and the dependence on foreign trade; cyclical change and financial equilibrium; public sector and economic policy in an open economy.
Summary
Adopting a disequilibrium approach in analyzing the inter-relation between real and financial development in industrial countries, this volume discusses such subjects as factor income distribution, financial flows and stocks, economic stability, and production, wages and prices.
