Demand and growth regimes in finance-dominated capitalism and a progressive equality-, sustainability- and domestic demand-led alternative

Abstract

Making use of a post-Keynesian/Kaleckian two-country stock-flow consistent (SFC) simulation model, we shed light on different regimes in modern finance-dominated capitalism, their interaction at the global scale, and then on the changes in regimes after the 2007-09 crises. Most importantly, we present the main features of a progressive and more stable equality-, sustainability- and domestic demand-led regime. We show that the main features of such a regime will have to focus on a ‘reformed capitalism’ with regulated finance, a more equal distribution of income and active government fiscal policies, as guide posts for progressive social democracy.

Keywords

• post-Keynesian macroeconomics
• financialisation
• growth regimes
• inequality
• debt
• social capitalism