COMPUSTAT data on 12,000 firms for the years 1956-1992 indicate that large firms hold less cash as a percentage of sales than do small ones. Whether comparisons are made within or across industries, the elasticity of cash balances with respect to sales is about 0.75. Firms headquartered in...

I show that the “indivisible labor” models of Diamond and Mirrlees (1978, 1986), Hansen (1985), Rogerson (1988), Christiano and Eichenbaum (1992) and many others are, when aggregated across persons with the same marginal utility of income, equivalent to the divisible labor model of Lucas and...