Abstract:The paper seeks to distinguish between two broad perspectives on financialisation. The first, taking the view that financialisation relates to the growth of the financial sector in its operations, power etc.. On that basis, financialisation has been proceeding with ups and downs for possibly thousands of years. The specific forms which financialisation may have taken in the past few decades are outlined. The findings from mainstream economics literature on one aspect of financialisation (growth of bank deposits, growth of stock markets) and economic growth are reviewed. The second perspective views financialisation (financialised capitalism) as a stage or epoch of capitalism dating from circa 1980.

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: Proposals under the headings of employer of last resort (ELR) and job guarantee have been made under which jobs would be available to all at a basic wage. These schemes promise a combination of full employment and price stability. This paper examines whether they would be able to deliver on such a promise. The paper discusses the notion of 'functional finance' which forms an important element of ideas on ELR. The nature and role of money as envisaged in the tax driven money approach which is often associated with the ELR proposals is critically examined. It is argued that whilst the ELR budgetary costs may be relatively small, this would also be the case from any public sector employment program. The question is raised as to whether there would be jobs of a type which could fit in with the ELR proposals, and what the nature of these jobs might be. The paper considers the extent to which ELR would involve underemployment and unemployment by another name. The possible inflationary implications of the ELR are next considered. This has two aspects : first to consider whether inflation would result from unemployment falling below any form of supply-side inflation barrier (such as a NAIRU), and second to consider whether the use of a base wage would bring price stability as claimed. In the subsequent section, the idea that ELR employment would form a buffer stock is critically examined.

The nature of the non-accelerating in¯ation rate of unemployment (NAIRU) is analysed. The focus of our analysis is the role of aggregate demand and capacity in the context of the NAIRU. Two aspects of the relationship between the level of aggregate demand and the NAIRU are of particular signi®cance. First, it is argued that the real wage±employment relationship based on enterprise decisions cannot be fully articulated without reference to the level of aggregate demand. Second, a model which allows for variable returns to labour and the notion of full capacity is used to explore the effects of shifts in the capital stock on the real wage±employment relationship. The model is speci®cally used to explore whether a suf®ciently expansionary environment can generate suf®cient investment to shift that relationship until the NAIRU is compatible with full employment. A number of limitations on the conclusions reached are considered, and the policy implications are brie¯y considered.

The focus of this paper is to investigate the importance of the capital stock in the determination of wages and unemployment in a range of EMU countries and to compare the results across countries. A timeseries analysis is conducted in the case of nine euro area countries, which were selected solely on the basis of data availability and consistencySpain. The paper begins with a short review of the literature on capital stock and unemployment, before it deals with the theoretical model. This is followed by estimation and testing of the theoretical model put forward, using both time-series and panel data. The results are supportive of the main hypothesis of the paper: capital stock is an important determinant of unemployment and wages in the countries considered for the purposes of the paper.