A study on the financialization of the contemporary economy from the perspective of the theory of endogenous money supply

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This study theoretically and empirically examined what the“financialization” (often considered as increasing impacts of the financial sector’sactivities on both domestic and international economies) implied for the contemporaryeconomy by extending the Post-Keynesian theory of endogenous money supply to incorporatethe recent evolution of financial systems, particularly the securitization of loan claims.The results of this study showed that the evolution of financialization would tend tomake the macro economy more vulnerable to financial instability.