Thursday, August 21, 2008

Too Much of GDP is "Financial Services"

Former IMF expert Kenneth Rogoff recently: "... [T]he financial system has become very bloated in size and needed to shrink."

Kevin Phillips in his new book "Bad Money" makes similar arguments. Phillips suggests a historical correlation between a nation's "financialization" -- for example measured by the percent of GDP (or its equivalent) represented by financial services -- and that nation's decline.

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