Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/243143 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
ZÖSS Discussion Paper No. 87
Publisher: 
Universität Hamburg, Zentrum für Ökonomische und Soziologische Studien (ZÖSS), Hamburg
Abstract: 
This paper explains the emergence of financialisation of nonfinancial corporations (NFCs) in the USA by way of the increased pension fund savings of white-collar workers which can be considered by Monetary Circuit Theory (MCT) as 'leakages' causing equity issuances to be replenished. The indirect causal nexus can briefly be explained that pension fund savings of white-collar workers have been facilitated by the increasing wage differential between white-collar and blue-collar workers which is driven by the increased market concentration. Since pension funds savings are channelled to financial markets instead of being spent for consumption goods, liquidity deficits of firms being replenished throughout stock markets and because of excess inflows into financial markets, profit expectations of NFCs from liquid financial assets have come to exceed the quasi-rent expectations from illiquid capital assets due to depressed demand for consumption goods. This paper stands as a reconstructive summary of findings of three published articles on each arguments of causal nexus and a contribution to MCT which has not yet considered market concentration.
Subjects: 
financialisation
market concentration
white-collar workers
wage differential
Monetary Circuit Theory
JEL: 
E44
J31
L1
Document Type: 
Working Paper

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