On financialization and its future

Abstract

Born as a term with a critical connotation towards finance, financialization has been widely employed in social sciences, despite the vagueness often surrounding it. In this article we discuss the concept of financialization with a focus on three dimensions. First, we highlight the crucial role of theory in shaping the depth of one’s understanding of the term. Second, we discuss the merits and limitations of the term as a means for bringing together researchers from different communities. Third, we reflect on its future. We argue in particular that the various phenomena associated with financialization involve different boundaries and temporalities. These differences are important, first for appreciating the openness of possible outcomes, and second, for anticipating potential convergences in scholarly perceptions of financialization that might occur in the near future.

Finance and growth nexus: An international analysis across cities

“…Employing similar methods to earlier research, the post-2008 studies have highlighted a concave relationship between finance and growth, with a positive relationship prevailing at lower levels of financial development but gradually turning negative as finance grows. This is a considerable step forward and one which brings this branch of literature a few steps closer to the critical analyses developed by heterodox economics and geography (these studies are often categorised under the overarching term ‘financialisation’; for discussion, see Ioannou and Wójcik, 2019, amongst others).…”

A fresh look at contemporary perspectives on urban housing affordability

“…Allon, 2010). This literature has increased substantially since the GFC drew attention to the personal, societal and economic risks as national/regional housing markets became embedded in global financial capitalism (see reviews in Aalbers, 2016;Allon, 2010;Ioannou & Wójcik, 2018;Sawyer, 2013;Van der Zwan, 2014).…”

“…With a flood of 'cheap money' around the globe moving into real estate in large metropolitan areas under financialized capitalism in the post GFC period, land/house prices have increased rapidly in western countries often reaching new highs in the 2010s (The Economist, 2019, p. 85). Despite larger loan sizes chasing higher house prices, household incomes have been mostly flat (Ioannou & Wójcik, 2018), resulting in 'housing affordability problems' going further up the income scale to include middle-income households in major metropolitan areas. Wetzstein (2017) refers to this as another global crisis in the making, the Global Urban Housing Affordability Crisis which has winners (homeowners, investors, speculators) and losers (those in overcrowded housing, renters, those without sufficient money for other expenses)a crisis which is likely to get worse.…”

Variegated intersections of neoliberalism and financialization

“…And regardless, properly understanding their histories and present states requires looking beyond explicit interrogations of these concepts. The latter is undoubtedly true, but we still find these two concepts useful even if both defy simple definitions (on financialization see Aalbers, 2015, Ioannou and Wojcik, 2019, on neoliberalism see Brenner et al, 2010), and as with all theories their explanatory power has its limits. As such, in addition to ongoing debate over their usefulness in relative isolation, we think there is much value in explicitly interrogating the relationship between them.…”