Financialisation, oil and the Great Recession

Abstract

This article addresses the role of world oil price hike of 2007-08 in serving to transform the financial and banking crisis into what is commonly referred to the Great Recession. Existing literature on the global crisis of 2007-09 tends to view it as a financial or banking phenomenon, with analyses focusing mainly on state policies, governance mechanisms and market dynamics in transforming the banking crisis of 2007-08 into the economic recession of 2008-12/13 Although often attributing the global meltdown to wider phenomenon of financialisation, rarely do existing perspectives delve into the role of the commodity sector in the global credit crunch. In this paper, we aim to fill this gap, by inquiring into the role played by oil as a financial asset class in the political economy of the global crisis.