How money is channeled from savers to borrowers shapes household, firm, and state behavior.

Evidence

Households make different choices about housing and education when mortgages and student loans can be resold as securities rather than held by banks until they are paid off (Davis 2009). Businesses funded primarily by financial markets, as in the United States, look different from businesses funded by families or banks, as in Germany (Zysman 1984). When they raise money exclusively through taxes and loans, states’ capacities look different from when they raise funds on financial markets (Carruthers 1996). — Gerald F. Davis & Suntae Kim, Financialization of the Economy, 13

Categorization

• SEED: A potential article angle: how securitization quietly rewrote the American life-course — homeownership and student debt behavior as downstream effects of resale markets, a mechanism most people never perceive.
• XREF: connects to: Securitization transforms debt from a personal bank relationship into an abstract market connection — Gerald F. Davis & Suntae Kim, Financialization of the Economy, 46

Related

• Securitization transforms debt from a personal bank relationship into an abstract market connection (similarity 0.83)
• Financial markets reshaped households, corporations, and states over the past 30 years. (similarity 0.79)

Broader Connections

• Securitization transforms debt from a personal bank relationship into an abstract market connection #expands (0.85) — Gerald F. Davis & Suntae Kim, Financialization of the Economy, 46