increase their liquidity ratios when macroeconomic uncertainty or idiosyncratic uncertainty increases. …This paper investigates the link between the optimal level of non-financial firms' liquid assets and uncertainty. We … develop a partial equilibrium model of precautionary demand for liquid assets showing that firms alter their liquidity ratio …

uncertainty. We develop a structural model of a firm's value maximization problem that predicts that as macroeconomic un-certainty … macroeconomic uncertainty increases, firms decrease their levels of leverage. Furthermore, we demonstrate that our results are …

-level uncertainty. We develop a structural model of a firm's value maximization problem that predicts that as industry-level uncertainty … increases the firm will increase its optimal level of liquidity. We test this hypothesis using a panel of German firms drawn … from the Bundesbank's balance sheet database and show that greater uncertainty at the industry level causes firms to …

more highly correlated; moreover, at these times, money supply positively affects financial market liquidity, albeit with a … lag of two weeks. During normal times, increases in mutual fund flows enhance stock market liquidity and trading volume …, but during financial crises, U.S. government bond funds see higher inflows, resulting in increased bond market liquidity …