Financialisation and capital accumulation in the non-financial corporate sector:: A theoretical and empirical investigation on the US economy: 1973-2003

Abstract This paper develops a multi-sector growth model with human capital accumulation. In this model, human capital induces structural change through two channels: changes in relative prices and changes in the investment rate of physical and human capital. We show that the specifications of the model give rise to a generalized balanced growth path (GBGP). Furthermore, We show that the model is consistent with (i) the decline in agriculture, (ii) the hump-shaped of manufacturing, (iii) the rise of the services sector, and (iv) the path of human capital accumulation in the US economy during the 20th century. Given the findings, We outline that imbalances between physical and human capital contribute to explain cross-country differences in the pace of structural change.

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WELFARE EFFECTS OF PATENT PROTECTION IN A GROWTH MODEL WITH R&D AND CAPITAL ACCUMULATION

Macroeconomic Dynamics ◽

10.1017/s1365100519000233 ◽

2019 ◽

pp. 1-24

Author(s):

Yibai Yang

Keyword(s):

Social Welfare ◽

Growth Model ◽

Capital Accumulation ◽

Patent Protection ◽

Welfare Analysis ◽

Welfare Effects ◽

Us Economy ◽

The Us ◽

Welfare Implications ◽

Relative Productivity

This study explores the welfare effects of patent protection in a Romer-type expanding variety model in which R&D and capital accumulation are both engines of growth. It shows that the comparison between the productivity of R&D and that of capital plays an important role in the welfare analysis. When the relative productivity of R&D compared to capital is high (low), social welfare takes an inverted-U shape for (is decreasing in) the strength of patent protection, and the welfare-maximizing degree of patent protection is no greater than (identical to) the growth-maximizing degree. Moreover, the model is calibrated to the US economy and the numerical results support these welfare implications.

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UNDERSTANDING THE SUPPLY AND DEMAND FORCES BEHIND THE FALL AND RISE IN THE US SKILL PREMIUM

Macroeconomic Dynamics ◽

10.1017/s1365100517000669 ◽

2017 ◽

Vol 23 (06) ◽

pp. 2191-2220 ◽

Cited By ~ 1

Author(s):

Francisco Parro

Keyword(s):

Technological Change ◽

Capital Accumulation ◽

Supply And Demand ◽

Skill Premium ◽

Unified Framework ◽

Product Demand ◽

Us Economy ◽

Assignment Model ◽

The Us ◽

Demand Shifts

I develop an assignment model to quantify, in a unified framework, the causal effects of supply and demand forces on the evolution of the college wage premium in the US economy. Specifically, I quantify the relative contributions of four different forces: (i) a within-sector non-neutral technological change, (ii) the creation of new high-skill services/sectors, (iii) polarizing product demand shifts, and (iv) shifts in the relative supply of skilled labor. The model considers endogenous human capital accumulation. I find that positive supply shifts completely explain the fall of the skill premium during the period 1970–1980. Demand forces play a major role in the post-1980 period, when the skill premium rises. Among the demand forces, the results show an increasing contribution of polarizing product demand shifts over the decades. On the other hand, the effect of the within-sector non-neutral technological change is more important in the earlier decades of the post-1980 period.

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Firms’ leverage ratio and the Financial Instability Hypothesis: an empirical investigation for the US economy (1970–2014)

Cambridge Journal of Economics ◽

10.1093/cje/bez004 ◽

2019 ◽

Vol 43 (6) ◽

pp. 1499-1523 ◽

Cited By ~ 2

Author(s):

Ítalo Pedrosa

Keyword(s):

Empirical Investigation ◽

Financial Fragility ◽

Financial Instability ◽

Positive Relation ◽

Firm Level ◽

Leverage Ratio ◽

Us Economy ◽

General Outcome ◽

The Us

Abstract ‘There are many ‘Minskian’ interpretations of how financial fragility builds up reflecting the unsolved tensions regarding the transition from micro to macro results in Minsky’s Financial Instability Hypothesis (FIH).’ Using firm-level and macroeconomic data to comply with the variety of FIH’s interpretations, we empirically assess the relations between leverage and financial fragility in the US economy (1970–2014). To evaluate firms’ financial fragility, we deploy Minsky’s scale—from the financially sounder to the more fragile firms: hedge, speculative and Ponzi. The main findings are the following: (i) the evolution of the aggregate leverage ratio does not account for the systemic financial fragility, measured by the frequency of speculative and Ponzi firms, and (ii) within the biggest firms, the leverage has increased along with the incidence of hedge financing, and for the smallest firms group the opposite has happened. We conclude that a positive relation between leverage and financial fragility cannot be deemed to be a general outcome.

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