The Institute for New Economic Thinking attributed recently three grants demonstrating the linkages between finance and real economy. The interview of G. Epstein, who advanced the concept of financialization and J. Crotty here:
They build on James Tobin's concept of functional efficiency to separate the financial sector's beneficial activities (mobilizing savings, financing investment, and reducing risk) from its socially inefficient activities (gambling, and distorting the political process).K. Pistor's work on "law and finance" and how law is underconceptualized and W. Lazonick's on how finance might harm innovation (echoing Levenstein's study) are also recognized as fresh economic thinking. The questions these scholars ask are essential if economics is to regain its scientific added value. The fact that an institute has to name that "new thinking" - where in fact, it is just "thinking" is telling about the relationship between the dominant ideology and its critics in economics fields.
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