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Financial institutions provide their customers a variety of unpriced services and cover their costs through interest margins - the interest rates they receive on assets are generally higher than the rates they pay on liabilities. In particular, banks pay below-public-market interest rates on...
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values of the standard Solow productivity residual. The equivalence holds if the representative household maximizes utility … while taking prices parametrically. This result justifies total factor productivity (TFP) as the right summary measure of …
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