Firms’ Objectives, Macroeconomic Growth Regimes and Finance

Building on the established Post Keynesian theory of the firm, we identify different stakeholders inside and outside the firm, and we assess their potentially conflicting objectives. Depending on the bargaining power of these different stakeholders, we can distinguish different macroeconomic growth regimes characterized by the priority given to the realization of the dominant class’s objectives. In previous work (Dallery and van Treeck, 2008), we have analysed these different institutional configurations of capitalism, which we call Fordism and financialisation, within a formal stock-flow consistent macro model. Here, we focus more specifically on linking macroeconomic growth dynamics to our reassessment of the Post Keynesian theory of the firm. Based on this microeconomic analysis, we stress the risk of financial fragility and macroeconomic instability involved with financialised capitalism.