Finance and the real economy: The global conjuncture

Recent analyses have related the increasing importance of finance capital in the global economy to the sluggishness and unevenness of growth in the world system. This paper is concerned with investigating the changing structure and role of finance and its links with the real economy following financial liberalization. It discusses the transmission mechanisms through which the "effects" of finance on the real economy are revealed, and examines in detail the nature of these effects in the case of Japan, which epitomized the tendency among late industrializers to shape a specific financial structure suited to meeting the challenge set by the pre-existing inequality in the international system.