Before the era of large central bank balance sheets, banks relied on incoming payments to fund outgoing payments in … order to conserve scarce liquidity. Even in the era of large central bank balance sheets, rather than funding payments with … abundant reserve balances, we show that outgoing payments remain highly sensitive to incoming payments. By providing a window …

This paper introduces an endogenous network of payments chains into a business cycle model. Agents order production in … bilateral relations. Some payments are executed immediately. Other payments, chained payments, are delayed until other payments … are executed. Because production starts only after orders are paid, chained payments induce production delays. In …