Publications

Working Paper No. 801 | May 2014

The Political Economy of Shadow Banking

Debt, Finance, and Distributive Politics under a Kalecki-Goodwin-Minsky SFC Framework

This paper describes the political economy of shadow banking and how it relates to the dramatic institutional changes experienced by global capitalism over past 100 years. We suggest that the dynamics of shadow banking rest on the distributive tension between workers and firms. Politics wedge the operation of the shadow financial system as government policy internalizes, guides, and participates in dealings mediated by financial intermediaries. We propose a broad theoretical overview to formalize a stock-flow consistent (SFC) political economy model of shadow banking (stylized around the operation of money market mutual funds, or MMMFs). Preliminary simulations suggest that distributive dynamics indeed drive and provide a nest for the dynamics of shadow banking.


Publication Highlight

Working Paper No. 887
Trump’s Bait and Switch
Job Creation in the Midst of Welfare State Sabotage
Author(s): Pavlina R. Tcherneva
March 2017

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