Money Creation and the Shadow Banking System. Adi Sunderam, December 2013, Paper. "It is widely argued that shadow banking grew rapidly before the recent financial crisis because of rising demand for money-like claims. This paper assesses a key premise of this argument that investors actually treated short-term debt issued by shadow banks as a money-like claim. We present a model where demand for money-like claims is satisfied by deposits, Treasury bills, and shadow bank debt. The model provides predictions about the price quantity dynamics of these claims, as well as the behavior of monetary authority..."