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Although the modern theory of financial intermediation portrays liquidity creation as an essential role of banks, comprehensive measures of bank liquidity creation do not exist. We construct four measures and apply them to data on U.S. banks from 1993-2003. We find that bank liquidity creation increased every year and exceeded $2.8 trillion in 2003. Large(More)
Physics says that it cannot deal with the mind-brain problem, because it does not deal in subjectivities, and mind is subjective. However, biologists (among others) still claim to seek a material basis for subjective mental processes, which would thereby render them objective. Something is clearly wrong here. I claim that what is wrong is the adoption of(More)
Although the modern theory of financial intermediation portrays banks as liquidity creators, comprehensive measures of bank liquidity creation do not exist. We construct such measures and apply them to data on U.S. banks from 1993-2003. Based on our preferred measure, the amount of liquidity created by the banking sector has grown by approximately(More)
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