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Barnett, W.A. (1987) The Microeconomic Theory of Monetary Aggregation. In: Barnett, W.A. and Singleton, K.J., Eds., New Approaches in Monetary Economics, Cambridge University Press, Cambridge, 115-168. Reprinted in Barnett, W.A. and Serletis, A., Eds., (2000) The Theory of Monetary Aggregation, North Holland, Amsterdam, Chapter 3, 49-99.
https://doi.org/10.1017/CBO9780511759628.007

has been cited by the following article:

• TITLE: A Nonparametric and Aggregation Theoretic Approach for Measuring Productivity of US Banks during 2006-2016

  AUTHORS: Fatima Hasan

  KEYWORDS: Data Envelopment Analysis, Malmquist Index, Aggregation Theory, Bank Efficiency, Technical Change

  JOURNAL NAME: American Journal of Operations Research, Vol.12 No.5, September 20, 2022

  ABSTRACT: Existing literature related to efficiency measurement and productivity analysis of banks is swarmed with the input-output classification of banks based on using accounting conventions. This usage varies from paper to paper. No two research papers are in consensus as to which classification should be used. This present work, however, uses the input-output classification of banks based on Barnett’s generalized model of production for financial intermediaries originally proposed in Barnett (1987)[1]. This model is based on economic theory definitions of inputs and outputs of a bank. Using this classification, the paper applies Data Envelopment Analysis to US banks during 2006-2016. This new methodology seeks to resolve and fix the issue of lack of consensus regarding which inputs and outputs to use for productivity analysis of banks. Furthermore, a standardized way of measuring productivity across banks is developed which can be used all over the world. This is accomplished by using the Malmquist Index of Productivity which is a tool used under Data Envelopment Analysis. The paper further establishes the connection of this tool with Barnett’s generalized model of production for financial intermediaries. Results indicate very high efficiency levels for US banks even post financial crisis. The reason for this performance is the cleansing of the financial system as unhealthy banks either left the scene or were merged. Better risk management, cost management and efficiency of structure of funding are some other reasons for high efficiency.