Concentration, Conflict and Growth: A Study of the US Economy Since 1950

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This paper will try to analyze some stylized facts for the US economy since 1973 and contrast them with what has come to be popularly known as the golden age (1950-73). Along with an increase in the profit share as well as wealth concentration in post-1973 period, there has been a dramatic increase in the average consumption as a proportion of the GDP. Simultaneously, there has been financial deregulation resulting in an unprecedented level of freedom and advantage to the rentiers. All this was happening while the growth rate of the economy declined compared to the golden age period. We argue that there is a link between these seemingly disjoint processes viz. growth, concentration and financialization of capital, which could be studied in a Kaleckian-Keynesian framework. The processes of concentration and financialization have had two opposite effects, though not necessarily equal in their impact, on the economy; on the one hand, it gave a boost to consumption through the wealth effect and on the other it led to under-investment. We study both these processes theoretically by building a growth model where both these processes play key roles and then we attempt to substantiate our theoretical claims by statistical and econometric analysis.

Keywords: Concentration, Monopoly, Financialization, Growth, Inflation
Stream: Economics and Management
Presentation Type: Paper Presentation in English
Paper: A paper has not yet been submitted.


Visiting Fulbright Fellow, Political Economy Research Institute (PERI), University of Massachusetts
Amherst, Massachusetts, USA

This is the dissertation topic for my PhD for which I am enrolled at Jawaharlal Nehru University(JNU), New Delhi,India. Though for the last few months, I have been in the US to facilitate my research since my focus of study is the US economy. I have completed my masters in Economics from JNU in 2001 and this is my last year of PhD. Along with an interest in Economics, I have been actively involved in progressive students' politics for quite a few years now, the essential theme of which is to fight for a better and humane world. I have been the President of the Students' Union at JNU for two consecutive years which has been a learning experience for me.

Ref: I07P0771