Financialization and Its Link with Long-Run Growth

Each country’s financial system is a part of the global financial system. Economies of all countries become more and more globalized including their financial systems. Financialization, i.e. the process in which financial markets and their participants gain more influence over the functioning of enterprises/companies and the framework of the financial system, changes the functioning of the economic system, both at the macro- and microeconomic level. It results not just in increasing the importance of the financial sector in relation to the real sector, but as well as in transferring the income from the real economy to the financial sector, contributing to the growth of income inequality and stagnant wages (Orhangazi, 2008; Tamašauskienė et al., 2016). Purpose – this paper deals with the question concerning global aspects of financialization and its aim is twofold: (i) overviewing recent contributions in this field to define financialization, briefly narrate its genesis emphasizing problems caused by financialization and (ii) to analyse the globalization aspect of financialization over the last half of the century at country level examining whether and to what extent this aspect of globalization is spread out across different regions and income groups and how it is linked with long-run growth.