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The Inaugural Lecture of Professor Engelbert Stockhammer: Distribution, deb...
Wed 14 December 2016, 19:00 – 21:00 GMT
Rising inequality and financialisation have been hall marks of macroeconomic development under neoliberalism. The lecture offers an account of Neoliberalism based on post-Keynesian monetary theory and its typology of demand regimes. Financialisation has been one of the major forces behind increasing inequality, but it also has had profound impact on economic growth and stability. There is, however, national variation in the social settlements during debt-driven boom: While the Anglo-Saxon countries experienced the rise of the superrich, in southern Europe the boom came with a temporary consolidation of welfare state structures. Both ended with a crash. Neoliberalism has transformed social and financial relations but it has not given rise to a sustained profit-led growth process. Instead, growth has relied either on financial bubbles and rising household debt (‘debt-driven growth’) or on net exports (‘export-driven growth’). In Europe the financial crisis has been amplified by an economic policy architecture (the Stability and Growth Pact) that aimed at restricting the role of fiscal policy and monetary policy. This neoliberal economic policy regime in conjunction with the separation of monetary and fiscal spheres has turned the financial crisis of 2007 into a sovereign debt crisis in southern Europe. This has not only led to a lost decade for southern European countries in terms of growth, but also undermined the existing social compromise. A meaningful social and economic reform requires a strategy for de-financialisation as well as redistribution.