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Financial Markets and Economic Growth

Abstract : The present thesis is a contribution to the analysis of the relationship between the real and the financial sector of the economy. The corresponding gap in the scientific literature is closed. It is concluded that the classical concept of the "wages fund," after some modifications, can serve as a useful tool in the macroeconomic analysis of the financial market. This approach simplifies the study and the exact description of the real functions accomplished by the financial market. It is maintained that the function of this market consists in allocating the available fund of consumers' goods - the wages fund - to those places where it is needed the most. So there is a very close relationship between the financial market and the satisfaction of human needs. The second important concept for the analysis of the relationship between the real and the financial sector is the value of money. We argue that money is only accepted in business and on the financial market because it has the power to purchase consumers' goods. If it did not have this power, nobody would be ready to exchange a real good against it. So in allocating the monetary savings, the financial market, in real terms, indeed allocates the available consumers' good. The analysis of the value of money thus opens up the way to a new conception of the real side of the financial market based on the wages fund theory. We apply our results to empirical data of the German economic crisis of 1873, which very much resembles the recent financial crisis on the occidental financial markets.
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Contributor : Anne-Marie Plé Connect in order to contact the contributor
Submitted on : Tuesday, April 1, 2014 - 2:35:15 PM
Last modification on : Wednesday, April 6, 2022 - 4:08:17 PM
Long-term archiving on: : Tuesday, July 1, 2014 - 11:55:35 AM


  • HAL Id : tel-00968723, version 1


Eduard Braun. Financial Markets and Economic Growth. Economics and Finance. Université d'Angers, 2011. English. ⟨tel-00968723⟩



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