"While the real sector has raced ahead, growth within the financial sector has lagged significantly behind," he said.
Ozgur Orhangazi of Roosevelt University has found that investment in the real sector of the economy falls when financialization rises.
The monetary side is important, of course — there is the inflation issue to deal with, there is the financial sector liberalization — but I think the real sector, in my mind, is the single most important thing right now.
Innovation can take place in the real sector and financial sector of the economy.
Accordingly, in sharp contrast to the existing evidences, we conclude that the architecture of an economy's financial system matters for real sector performance.
The paper examines the relation between the architecture of an economy's financial system its degree of market orientation and economic performance in the real sector.
For Indonesia, oil price has no significant effect on industrial production due to the successful diversification of the real sector to reduce the harmful impact of oil booms.
Minsky-like, crisis is shown to be endogenous to the model, working through the fragility of balance sheets in the real sector as well as in the financial sector.
As long as you got all these bad assets, as long as you have house prices declining, you've got a very, very dispirited financial sector, and real sector in the economy.
Flighty financial flows, systemic pressures against innovation, and unpriced environmental externalities all mean that real sector environmental performance will be adversely affected by financial sector dynamics, lacking appropriate policy markers.
