The Open UniversitySkip to content
 

The macroeconomics of Shadow Banking

Botta, Alberto; Caverzasi, Eugenio and Tori, Daniele (2018). The macroeconomics of Shadow Banking. Macroeconomic Dynamics (Early Access).

Full text available as:
[img]
Preview
PDF (Accepted Manuscript) - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader
Download (989kB) | Preview
DOI (Digital Object Identifier) Link: https://doi.org/10.1017/S136510051800041X
Google Scholar: Look up in Google Scholar

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.

Item Type: Journal Item
Copyright Holders: 2018 Cambridge University Press
ISSN: 1469-8056
Keywords: securitization; shadow banking; leverage; rentiers-Led regimes; income distribution
Academic Unit/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: Innovation, Knowledge & Development research centre (IKD)
Related URLs:
Item ID: 56027
Depositing User: Daniele Tori
Date Deposited: 07 Aug 2018 07:53
Last Modified: 17 Nov 2019 08:36
URI: http://oro.open.ac.uk/id/eprint/56027
Share this page:

Metrics

Altmetrics from Altmetric

Citations from Dimensions

Download history for this item

These details should be considered as only a guide to the number of downloads performed manually. Algorithmic methods have been applied in an attempt to remove automated downloads from the displayed statistics but no guarantee can be made as to the accuracy of the figures.

Actions (login may be required)

Policies | Disclaimer

© The Open University   contact the OU