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Social sciences
- Consumption, saving, production, investment, labour markets and informal economy
- Macro-based behavioural economics
- Macroeconomic policy, macroeconomic aspects of public finance and general outlook
- Monetary policy, central banking and the supply of money and credit
- Macroeconomics and monetary economics not elsewhere classified
The research constructs a stock-flow consistent macroeconomic agent-based model (SFC-MABM) to contribute to two macro-financial policy debates, with a focus on the US economy. First, the US economy has become increasingly financialized, as exemplified by pre-and post-crisis stylized trends of rising household indebtedness, growing financial system size, shadow banking network expansion, soaring inequality levels, a declining labour share in total income, and increased corporate saving. Using the SFC-MABM, it is investigated to what extent increased earnings concentration and rising share buyback volumes can explain the pre-crisis stylized facts. Moreover, it is assessed to what degree increased earnings concentration, rising share buyback volumes, the Federal Reserve’s large-scale asset purchased programs and Basel-III macroprudential regulations can account for the post-crisis stylized trends. Second, both pre-and post-crisis periods have witnessed a strong expansion of the shadow banking system and a significant increase in securitized loan volumes, raising concerns about financial soundness. Building on demand-and supply-side perspectives towards shadow banking, the SFC-MABM is employed to evaluate to what degree a variety of policy measures – ranging from higher deposit insurance thresholds to lower commercial bank capital ratios – would have been effective in slowing down the shadow banking network’s expansion.