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Cited by 58Economic Theory and PolicyPolitical Economy and MarxismHousing, Finance, and Neoliberalism

Finance Is Not the Economy: Reviving the Conceptual Distinction

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Bezemer, Dirk, Hudson, Michael·2016·Journal of Economic Issues
DOI 10.1080/00213624.2016.1210384
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Abstract

:Conflation of real capital with finance capital is at the heart of current misunderstandings of economic crisis and recession. We ground this distinction in the classical analysis of rent and the difference between productive and unproductive credit. We then apply it to current conditions, in which household credit — especially mortgage credit — is the premier form of unproductive credit.This is supported by an institutional analysis of postwar U.S. development and a review of quantitative empirical research across many countries. Finally, we discuss contemporary consequences of the financial sector’s malformation and overdevelopment.

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  • Post-Keynesian economists have emphasised the growth of private debt (in particular mortgage credit) as a key source of income for financial rentiers enabled by deregulation and the shift towards consumer-price inflation targeting by central banks, alongside declining public investment.

    “Post-Keynesian economists have emphasised the growth of private debt (in particular mortgage credit) as a key source of income for financial rentiers enabled by deregulation and the shift towards consumer-price inflation targeting by central banks, alongside declining public investment”

    From Mapping modern economic rents: the good, the bad, and the grey areas (2023) · cites this paper as Bezemer and Hudson, 2016

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  • The financial sector increasingly allocates resources towards unproductive activities, charging fees and interest.

    “The financial sector increasingly allocates resources towards unproductive activities, charging fees and interest in the process”

    From Mapping modern economic rents: the good, the bad, and the grey areas (2023) · cites this paper as Bezemer and Hudson, 2016

  • The shift of many non-financial firms' portfolios towards large investments in financial assets has 'disconnected' their profitability from value creation further contributing to the decline of real investment and growth.

    “Second, the shift of many non-financial firms' portfolios towards large investments in financial assets has 'disconnected' their profitability from value creation further contributing to the decline of real investment and growth”

    From Mapping modern economic rents: the good, the bad, and the grey areas (2023) · cites this paper as Bezemer et al., 2016

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Research works printed but not linked: 45

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Cited by

Sorted by citations

Authors
Bezemer, D., & Hudson, M.
Affiliations
  • University of Groningen (NL)
  • Peking University (CN)
ORCID
Bezemer, Dirk
Venue
Journal of Economic Issues
Publisher
Informa UK Limited
Published
2016-07-02
Volume
50
Issue
3
Pages
745-768
ISSN
  • 0021-3624 (ISSN-L)
  • 1946-326X
DOI
10.1080/00213624.2016.1210384
OpenAlex
W2518450452
Cited by
58
References
0
Citations by year
2026: 2 · 2025: 2 · 2024: 2 · 2023: 3 · 2022: 7 · 2021: 11 · 2020: 4 · 2019: 9 · 2018: 1 · 2017: 15 · 2016: 2
FWCI
22.94
Type
journal article
Language
en
Open access
Licence
Locations
  • Journal of Economic Issues (publishedVersion, other-oa)
  • RePEc: Research Papers in Economics (submittedVersion)
  • University of Groningen research database (University of Groningen / Centre for Information Technology) (submittedVersion, cc-by)
Topics
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Economic Theory and Policy
  • Social Sciences › Sociology and Political Science › Political Economy and Marxism
  • Social Sciences › Economics, Econometrics and Finance › Finance › Housing, Finance, and Neoliberalism
Keywords
physical capital, financial capital, rent, productive credit, household credit, mortgage credit, economic crisis, economic recession, classical economics

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