Financialization cannot be reduced to stock market developments.

Evidence

It reveals that the upward surge in portfolio income in the last three decades was largely accounted for by increases in the interest component,rather than by capital gains,which merely held steady over the period, or dividends, which lost share relative to the other two components. This is a surprising result,and it argues strongly against reducing financialization to developments in the stock market. While there clearly is a relationship between financialization and the bull market of the 1980s and 1990s,it is a more indirect one than is commonly assumed,at least as reflected by this measure. — Greta R. Krippner, The Financialization of the American…, 66

Categorization

• XREF: Challenges the common popular equation of financialization with ‘the stock market boom’ — connects to broader critical finance literature distinguishing interest-bearing accumulation from equity speculation.
• QUESTION: Why did interest income specifically surge over capital gains? Worth chasing the decomposition of portfolio income for non-financial firms.

Related

• Financialization comprises both finance-sector dominance and nonfinance firms’ financial investing. (similarity 0.84)
• Financialization does not measurably raise firm profits or financial-asset productivity. (similarity 0.84)
• Prior research linked financialization to inequality mostly indirectly, not causally. (similarity 0.83)
• Financialization can be measured by comparing non-financial firms’ portfolio income to their cash flow. (similarity 0.83)
• Nonfinance firms increasingly derived income from financial markets (similarity 0.83)
• Financialization marks a decisive shift from production-based to finance-driven accumulation. (similarity 0.83)
• Nonfinancial firms’ portfolio income relative to cash flow surged by the late 1980s (similarity 0.82)
• Financialization must be measured by profit generation, not employment or output (similarity 0.82)
• Scholars asserted financialization’s existence without providing direct evidence (similarity 0.81)
• Nearly 40% of S&P 500 earnings came from financial activities by 2000 (similarity 0.81)
• Financialization lacks rigorous empirical evidence defining its timing and magnitude (similarity 0.81)
• The US economy became increasingly financialized in the post-1970s period. (similarity 0.81)
• Financialization channels income toward the wealthy and depresses productive investment and wages. (similarity 0.81)
• Financialization both derives profits from finance and drains capital from productive investment (similarity 0.81)
• Financial profits relative to non-financial profits rose three to fivefold by the late 1990s. (similarity 0.81)