Financing, economic growth and functionality of the financial system: a keynesian approach
DOI:
https://doi.org/10.1590/1980-53574326lfpKeywords:
financial system, economic growth, Post-Keynesian theoryAbstract
This paper analyzes the role of the financial system to economic growth, and the conceptof ‘functionality’ of the financial system under a Post Keynesian approach. It arguesthat in such theoretical approach a functional financial system is that supplies creditin order to meet the agents’ liquidity needs so that they can effectuate their expenditures,and at the same time is able to create suitable financial tools to fund the shortterm debts of the investors’ firms. Therefore, such financial system can allow a highercapital accumulation rate that would be able by the simple accumulation of previoussavings. The paper stresses that the concept of financial system functionality presumesthe existence of a diversified structure of financial institutions and financial assets thatare able to offer financing alternatives to the agents’ (mainly firms) expenditures.
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