Botta, Alberto; Caverzasi, Eugenio and Tori, Daniele
(2018).
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| DOI (Digital Object Identifier) Link: | https://doi.org/10.1017/S136510051800041X |
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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 |
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| 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 |
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