Introduction (Unpublished)
It is well-established that the growing dominance of financial institutions and financial motives more broadly are aversely effecting labour market institutions (LMI’s) in both higher and lower income economies.
This erosion in LMI’s was further exacerbated following the systematic upsurge of neoliberalist policies and economic globalisation in the 1980’s. Figure 1 depicts the beginning of this global financial convergence characterized by increasing private-sector credit, and stock market capitalisation.
The relevant consequences behind favouring financial capital accumulation to labour is not commonly discussed in the literature, especially in a sample of higher and lower income countries.
The forthcoming literature review guides the reader through three things: 1) how should financialisation be understood for the purposes of this study, since its use in the economic context can be rather ambiguous at times, 2) through which channels can financialisation affect the labour share, and 3) how can this effect be econometrically estimated.