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The endogeneity of money and the securitizing system. Beyond shadow banking

Author

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  • Caverzasi, Eugenio
  • Botta, Alberto
  • Capelli, Clara

Abstract

Financialization is not just a phenomenon regarding the exponential growth of the financial sector with respect to the real side of the economy. This paper aims shedding some light on the nature and the systemic impact of new elements in the financial realm and particularly on the so-called shadow banking through a macroeconomic perspective. Our analysis shows how financial evolutions have had an impact on the monetary system and on the whole economy at multiple levels. It involved the channel through which money enters the economic system, the rise of new financial institutions and activities, the implementation of monetary policies, and the relation between the real and the financial sector. What we are witnessing is not the rise of a shady version of something old whereas the surge of new forms of financial accumulation.

Suggested Citation

  • Caverzasi, Eugenio & Botta, Alberto & Capelli, Clara, 2018. "The endogeneity of money and the securitizing system. Beyond shadow banking," Greenwich Papers in Political Economy 18527, University of Greenwich, Greenwich Political Economy Research Centre.
    • Handle: RePEc:gpe:wpaper:18527
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    File URL: http://gala.gre.ac.uk/id/eprint/18527/1/Money%20endogeneity%20and%20shadow%20banking.pdf
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    References listed on IDEAS

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    1. Bakk-Simon, Klára & Borgioli, Stefano & Giron, Celestino & Hempell, Hannah Sabine & Maddaloni, Angela & Recine, Fabio & Rosati, Simonetta, 2012. "Shadow banking in the Euro area: an overview," Occasional Paper Series 133, European Central Bank.
    2. Bakk-Simon, Klára & Borgioli, Stefano & Giron, Celestino & Hempell, Hannah S. & Maddaloni, Angela & Recine, Fabio & Rosati, Simonetta, 2012. "Shadow banking in the Euro area: an overview," Occasional Paper Series 133, European Central Bank.
    3. Riccardo Bellofiore, 2005. "Monetary Economics after Wicksell: Alternative Perspectives within the Theory of the Monetary Circuit," Palgrave Macmillan Books, in: Giuseppe Fontana & Riccardo Realfonzo (ed.), The Monetary Theory of Production, chapter 2, pages 39-51, Palgrave Macmillan.
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    Cited by:

    1. Botta, Alberto & Caverzasi, Eugenio & Russo, Alberto, 2022. "When complexity meets finance: A contribution to the study of the macroeconomic effects of complex financial systems," Research Policy, Elsevier, vol. 51(8).

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    More about this item

    Keywords

    endogenous money; securitization; shadow banking; inequality; financial instability;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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