Krishnamurthy, Arvind; Li, Wenhao - National Bureau of Economic Research - 2022
Bank-created money, shadow-bank money, and Treasury bonds all satisfy investors' demand for a liquid transaction medium …. Our results on the imperfect substitutability of bank and shadow-bank money also inform analyses of the coexistence of the … it helps resolve the money-demand instability and missing-money puzzles of the monetary economics literature …