Stagnation‐financialisation traps in the United States, Germany, Italy and Japan

Taking as its focus the seemingly endless cycle of falling growth, rising debt and inequality in advanced capitalist societies, this paper revisits comparative debates on stagnation and financialisation in the global Northern hemisphere. Central to the analysis is that the United States, Germany, Italy and Japan have entered a stagnation‐financialisation trap where surplus capital is no longer reinvested productively in the domestic economy. The root cause of this crisis is the same in all four countries: (i) the collapse of post‐war Fordism and wage‐led, demand‐driven growth and (ii) capital switching from domestic production to financial markets and global value chains. The ultimate outcome is contradictory; while economic growth in the productive economy is stagnating, growth in asset and commodity markets is soaring. Even so, the breadth and depth of stagnation and financialisation vary across time and space. Therefore, the paper concludes that the four case studies are not converging. Instead, they follow a common trajectory where significant heterogeneities are being reproduced.