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Botta, Alberto; Caverzasi, Eugenio and Tori, Daniele
(2020).
DOI: https://doi.org/10.1017/S136510051800041X
Abstract
We propose a simple short-run Post-Keynesian model in which the key aspects of shadow banking, namely securitization and the production of structured finance instruments, are explicitly formalized. To the best of our knowledge, this is the first attempt to broaden purely real-side Post-Keynesian models and their traditional focus on shareholder-value orientation, the financialization of non-financial firms, and the profit-led vs. wage-led dichotomy. We rather put emphasis on the role of financial institutions and rentier-friendly environment in determining the predominance of specific growth and distribution regimes. First, we illustrate the macroeconomic rationale of shadow banking practices. We show how, before the 2007–08 crisis, securitization and shadow banking allowed for an increase in profitability for the whole financial sector, while apparently keeping leverage under control. Second, we define a variety of shadow-banking-led regimes in terms of economic activity, productive capital accumulation, and income distribution.
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About
- Item ORO ID
- 56027
- Item Type
- Journal Item
- ISSN
- 1469-8056
- Keywords
- securitization; shadow banking; leverage; rentiers-Led regimes; income distribution
- Academic Unit or School
-
Faculty of Business and Law (FBL) > Business > Department for Accounting and Finance
Faculty of Business and Law (FBL) > Business
Faculty of Business and Law (FBL) - Research Group
- History and Political Economy (HYPE) of Business and Finance
- Copyright Holders
- © 2018 Cambridge University Press
- Related URLs
- Depositing User
- Daniele Tori