The relative sizes of the financial sector and the real economy

Whenever the relationship between the financial sector and the real economy is put forward as a problem, even if “only” as a matter of relative size, there is a need for an analytical framework to deal with the subject. Only such a theoretical understanding, at least one that is implicit, enables any analysis and subsequent assessment. However, there are no established theories about the relative sizes of the two sectors against which current developments can be measured. The approach taken here is therefore gradual and cautious: from the definitional background (Section 2.1), through long-range empirical studies on the relationship between financial sector and real economy development (Section 2.2), to the presentation of diverse variants of a decounline hvnothesis (Section 2.3).