In this paper we investigate the role and nature of the so-called shadow banking, in order to assess the impact that its rise exerted on the US economy and in particular on the financial and monetary systems. To reach this goal, we ground our work on post-Keynesian (PK) monetary theory and on the PK theory of endogenous money. The application of this theory to the analysis of the transformation of the U.S. financial system in the last 20 years allowed us to reach numerous conclusions on the nature of new financial institutions and practices. Understanding the different role played by Money Market Mutual Funds, Brokers and Dealers, Special Purpose Vehicles, and Commercial banks allows to draw important policy conclusions.
Eugenio Caverzasi is a Postdoctoral Researcher at the Marche Polytechnic University of Ancona (Italy). In 2013, he obtained a PhD in Economic Sciences from the University of Pavia (Italy). His dissertation focused on the financialization process, analyzed mainly through the theoretical framework of Hyman P. Minsky and the Stock-Flow Consistent modeling approach. Next to the PhD he holds two Master's degrees: International Relations from the University of Pavia and Economics from the University of Essex. Currently he is working at the Marche Polytechnic University. His main research interests are: Post-Keynesian Economics, Financialization, History of Economic Thought, and Macroeconomic Modeling. His recent works focus on analzying the so-called Shadow Banking under a macroeconomic perspective.