I'm a senior lecturer in economics at Hertfordshire Business School. Before joining Hertfordshire I was a lecturer at Kingston University, London. I hold a PhD degree from SOAS and have worked as economic adviser for international organisations such as the ILO and OECD. I also worked as an ODI fellow and senior economist in the National Treasury, South Africa. Supervisors: Jan Toporowski (SOAS)
This article reveals the processes of financialisation in the South African economy by tracing th... more This article reveals the processes of financialisation in the South African economy by tracing the sources and destinations of NFCs’ liquidity. The paper argues that rather than the volume of NFCs’ financial investment, the composition of financial assets is crucial to assess corporate financialisation in the country. Non-financial businesses in South Africa fundamentally transformed their investment behaviour during the 1990s, shifting from more productive uses such as trade credit towards highly liquid and potentially innovative (and therefore risky) financial investment. Following the direction of financial flows the article shows that – fuelled by foreign capital inflows – companies’ financial operations contributed to the price inflation in South African property markets.
Financialisation research has originally focussed on the US experience, but the concept is now in... more Financialisation research has originally focussed on the US experience, but the concept is now increasingly applied to emerging economies (EMEs). There is a rich literature stressing peculiarities of individual country experiences, but little systematic comparison across EMEs. This paper fills this gap, providing an overview of the debate and identifying six financialisation interpretations for EMEs. These different interpretations stress (1) financial deregulation (2) foreign financial inflows, (3) asset price volatility, (4) the shift from bank-based to market-based finance, (5) business debt, and (6) household indebtedness. We construct and compare measures of the six financialisation interpretations across a sample of 17 EMEs from Latin America, emerging Europe, Africa and Asia, contrasting them with the US and UK, two financialised economies. We find considerable variation in financialisation experiences of EMEs. Asset price volatility is found across continents. Asia has been more exposed to capital inflows, stock markets have gained importance and private sector debt risen. In emerging Europe financial deregulation has been more pronounced with lower levels but strong increases in household debt. The picture is similar in South Africa, the African EME in the sample, where household debt is comparatively high. Financialisation in Latin America is weaker according to our measures.
JEL classification: B50: Current Heterodox Approaches: General E30: Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) F34: International Lending and Debt Problems G01: Financial Crises G12: Asset Pricing; Trading Volume; Bond Interest Rates G15: International Financial Markets
The financial sectors of African LICs are still at an early stage of development so that lessons ... more The financial sectors of African LICs are still at an early stage of development so that lessons from the crisis could inform their financial sector development strategies. They have the advantage of latecomers. Moreover, their financial sectors, while generally still shallow, are experiencing fairly rapid growth. Combined with African countries’ existing vulnerabilities, such as limited regulatory capacity, and vulnerability to external shocks, this might pose risks to financial system stability. Despite the infrequent appearance of systemic banking crisis on the African continent over the past decade (see below), fast credit growth in many economies—even if at comparatively low levels—calls for caution, signalling the need for strong, as well as countercyclical, regulation of African financial systems. For policy-makers and researchers this poses the challenge of applying the lessons from the crisis in developed and previously in emerging countries to African LICs, while paying careful attention to the specific features of African financial systems.
Until recently, the deepening of financial markets in developing countries has been almost unequi... more Until recently, the deepening of financial markets in developing countries has been almost unequivocally seen as growth-enhancing. A well-developed capital market – so the argument – could provide a source of finance for productive investment, fostering growth. South Africa possesses one of the oldest stock exchanges among emerging economies, the Johannesburg Stock Exchange (JSE). Hence, it provides a good case study to scrutinise this growth-enhancing effect. The South African equity market is a source of substantial funds for mining companies, however, the employment impact of their activity is limited. This paper will show evidence that listed mining companies use the JSE to finance their speculation in assets instead of productive and job-creating investment. Detrimental effects on monetary policy and domestic credit growth can be expected since external finance is not flowing towards productive investment but ends up as cash holdings on corporate balance sheets. This trend in turn encourages rapid credit expansion, which recently favoured unsustainable consumption-driven growth in South Africa, leaving the country with heavy job losses and high household debt in the aftermath of the global financial crisis. The article is organised as follows: part II shows that precaution is a valid motivation to hold cash, but mining firms also need liquid assets due to the speculative nature of their investment. These South African findings will be contrasted with international empirical evidence as well as theoretical explanations offered by economic theory in part III. Finally, in part IV the socio-economic consequences of these cash holdings will be outlined in brief and from a macroeconomic perspective, before part V concludes.
Rosa Luxemburg, Oskar Lange and Michał Kalecki made important contributions to twentieth century ... more Rosa Luxemburg, Oskar Lange and Michał Kalecki made important contributions to twentieth century political economy that guided the thinking of their student Tadeusz Kowalik and his reinterpretation of the Keynesian Revolution. A wide range of contributors to this volume, including G.C. Harcourt and Peter Kriesler, Noemi Levy-Orlik, Gabriele Pastrello, Paul Zarembka, John Bellamy Foster, Roberto Lampa, Meghnad Desai, Marcin Kula, Jo Michell and Andrew Trigg, re-examine the theories of Luxemburg, Lange, Kalecki and Kowalik, by highlighting the common themes in their political economy and the neglected aspects of their work that Kowalik brought together in his writings.
Rosa Luxemburg, Oskar Lange and Michał Kalecki made important contributions to twentieth century ... more Rosa Luxemburg, Oskar Lange and Michał Kalecki made important contributions to twentieth century political economy that guided the thinking of their student Tadeusz Kowalik. A wide range of contributors to this volume, including Alberto Chilosi, Gary Dymski, John King, Mario Nuti, Alessandro Vercelli, Kazimierz Łaski, Leon Podkaminer, Edwin Le Heron, Malcolm Sawyer, Janusz Tomidajewicz, Pat Devine, Paul Mattick, Marc Lavoie, Paul Auerbach and Dimitris Sotiropoulos, examine how the ideas of Luxemburg, Lange, Kalecki and Kowalik, from finance to macroeconomics, the business cycle and the possibilities of Keynesian stabilisation, to illuminate our understanding of the crisis in twenty-first century capitalism.
This article reveals the processes of financialisation in the South African economy by tracing th... more This article reveals the processes of financialisation in the South African economy by tracing the sources and destinations of NFCs’ liquidity. The paper argues that rather than the volume of NFCs’ financial investment, the composition of financial assets is crucial to assess corporate financialisation in the country. Non-financial businesses in South Africa fundamentally transformed their investment behaviour during the 1990s, shifting from more productive uses such as trade credit towards highly liquid and potentially innovative (and therefore risky) financial investment. Following the direction of financial flows the article shows that – fuelled by foreign capital inflows – companies’ financial operations contributed to the price inflation in South African property markets.
Financialisation research has originally focussed on the US experience, but the concept is now in... more Financialisation research has originally focussed on the US experience, but the concept is now increasingly applied to emerging economies (EMEs). There is a rich literature stressing peculiarities of individual country experiences, but little systematic comparison across EMEs. This paper fills this gap, providing an overview of the debate and identifying six financialisation interpretations for EMEs. These different interpretations stress (1) financial deregulation (2) foreign financial inflows, (3) asset price volatility, (4) the shift from bank-based to market-based finance, (5) business debt, and (6) household indebtedness. We construct and compare measures of the six financialisation interpretations across a sample of 17 EMEs from Latin America, emerging Europe, Africa and Asia, contrasting them with the US and UK, two financialised economies. We find considerable variation in financialisation experiences of EMEs. Asset price volatility is found across continents. Asia has been more exposed to capital inflows, stock markets have gained importance and private sector debt risen. In emerging Europe financial deregulation has been more pronounced with lower levels but strong increases in household debt. The picture is similar in South Africa, the African EME in the sample, where household debt is comparatively high. Financialisation in Latin America is weaker according to our measures.
JEL classification: B50: Current Heterodox Approaches: General E30: Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) F34: International Lending and Debt Problems G01: Financial Crises G12: Asset Pricing; Trading Volume; Bond Interest Rates G15: International Financial Markets
The financial sectors of African LICs are still at an early stage of development so that lessons ... more The financial sectors of African LICs are still at an early stage of development so that lessons from the crisis could inform their financial sector development strategies. They have the advantage of latecomers. Moreover, their financial sectors, while generally still shallow, are experiencing fairly rapid growth. Combined with African countries’ existing vulnerabilities, such as limited regulatory capacity, and vulnerability to external shocks, this might pose risks to financial system stability. Despite the infrequent appearance of systemic banking crisis on the African continent over the past decade (see below), fast credit growth in many economies—even if at comparatively low levels—calls for caution, signalling the need for strong, as well as countercyclical, regulation of African financial systems. For policy-makers and researchers this poses the challenge of applying the lessons from the crisis in developed and previously in emerging countries to African LICs, while paying careful attention to the specific features of African financial systems.
Until recently, the deepening of financial markets in developing countries has been almost unequi... more Until recently, the deepening of financial markets in developing countries has been almost unequivocally seen as growth-enhancing. A well-developed capital market – so the argument – could provide a source of finance for productive investment, fostering growth. South Africa possesses one of the oldest stock exchanges among emerging economies, the Johannesburg Stock Exchange (JSE). Hence, it provides a good case study to scrutinise this growth-enhancing effect. The South African equity market is a source of substantial funds for mining companies, however, the employment impact of their activity is limited. This paper will show evidence that listed mining companies use the JSE to finance their speculation in assets instead of productive and job-creating investment. Detrimental effects on monetary policy and domestic credit growth can be expected since external finance is not flowing towards productive investment but ends up as cash holdings on corporate balance sheets. This trend in turn encourages rapid credit expansion, which recently favoured unsustainable consumption-driven growth in South Africa, leaving the country with heavy job losses and high household debt in the aftermath of the global financial crisis. The article is organised as follows: part II shows that precaution is a valid motivation to hold cash, but mining firms also need liquid assets due to the speculative nature of their investment. These South African findings will be contrasted with international empirical evidence as well as theoretical explanations offered by economic theory in part III. Finally, in part IV the socio-economic consequences of these cash holdings will be outlined in brief and from a macroeconomic perspective, before part V concludes.
Rosa Luxemburg, Oskar Lange and Michał Kalecki made important contributions to twentieth century ... more Rosa Luxemburg, Oskar Lange and Michał Kalecki made important contributions to twentieth century political economy that guided the thinking of their student Tadeusz Kowalik and his reinterpretation of the Keynesian Revolution. A wide range of contributors to this volume, including G.C. Harcourt and Peter Kriesler, Noemi Levy-Orlik, Gabriele Pastrello, Paul Zarembka, John Bellamy Foster, Roberto Lampa, Meghnad Desai, Marcin Kula, Jo Michell and Andrew Trigg, re-examine the theories of Luxemburg, Lange, Kalecki and Kowalik, by highlighting the common themes in their political economy and the neglected aspects of their work that Kowalik brought together in his writings.
Rosa Luxemburg, Oskar Lange and Michał Kalecki made important contributions to twentieth century ... more Rosa Luxemburg, Oskar Lange and Michał Kalecki made important contributions to twentieth century political economy that guided the thinking of their student Tadeusz Kowalik. A wide range of contributors to this volume, including Alberto Chilosi, Gary Dymski, John King, Mario Nuti, Alessandro Vercelli, Kazimierz Łaski, Leon Podkaminer, Edwin Le Heron, Malcolm Sawyer, Janusz Tomidajewicz, Pat Devine, Paul Mattick, Marc Lavoie, Paul Auerbach and Dimitris Sotiropoulos, examine how the ideas of Luxemburg, Lange, Kalecki and Kowalik, from finance to macroeconomics, the business cycle and the possibilities of Keynesian stabilisation, to illuminate our understanding of the crisis in twenty-first century capitalism.
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Papers by Ewa Karwowski
Keywords: financialisation, emerging markets, financial instability, asset price volatility, heterodox economics
JEL classification: B50: Current Heterodox Approaches: General E30: Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) F34: International Lending and Debt Problems G01: Financial Crises G12: Asset Pricing; Trading Volume; Bond Interest Rates G15: International Financial Markets
The South African equity market is a source of substantial funds for mining companies, however, the employment impact of their activity is limited. This paper will show evidence that listed mining companies use the JSE to finance their speculation in assets instead of productive and job-creating investment. Detrimental effects on monetary policy and domestic credit growth can be expected since external finance is not flowing towards productive investment but ends up as cash holdings on corporate balance sheets. This trend in turn encourages rapid credit expansion, which recently favoured unsustainable consumption-driven growth in South Africa, leaving the country with heavy job losses and high household debt in the aftermath of the global financial crisis.
The article is organised as follows: part II shows that precaution is a valid motivation to hold cash, but mining firms also need liquid assets due to the speculative nature of their investment. These South African findings will be contrasted with international empirical evidence as well as theoretical explanations offered by economic theory in part III. Finally, in part IV the socio-economic consequences of these cash holdings will be outlined in brief and from a macroeconomic perspective, before part V concludes.
Books by Ewa Karwowski
Keywords: financialisation, emerging markets, financial instability, asset price volatility, heterodox economics
JEL classification: B50: Current Heterodox Approaches: General E30: Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) F34: International Lending and Debt Problems G01: Financial Crises G12: Asset Pricing; Trading Volume; Bond Interest Rates G15: International Financial Markets
The South African equity market is a source of substantial funds for mining companies, however, the employment impact of their activity is limited. This paper will show evidence that listed mining companies use the JSE to finance their speculation in assets instead of productive and job-creating investment. Detrimental effects on monetary policy and domestic credit growth can be expected since external finance is not flowing towards productive investment but ends up as cash holdings on corporate balance sheets. This trend in turn encourages rapid credit expansion, which recently favoured unsustainable consumption-driven growth in South Africa, leaving the country with heavy job losses and high household debt in the aftermath of the global financial crisis.
The article is organised as follows: part II shows that precaution is a valid motivation to hold cash, but mining firms also need liquid assets due to the speculative nature of their investment. These South African findings will be contrasted with international empirical evidence as well as theoretical explanations offered by economic theory in part III. Finally, in part IV the socio-economic consequences of these cash holdings will be outlined in brief and from a macroeconomic perspective, before part V concludes.