We study the effect of real asset liquidity on a firm's cost of capital. We find an aggregate asset-liquidity discount … in firms' cost of capital that is strongly counter-cyclical. At the firm-level we find that asset liquidity affects firms … periods of high asset liquidity have lower cost of capital. This effect is stronger when the asset liquidity is provided by …

A model is developed where firms in a financial system have to settle their debts to each other by using a liquid asset …. The question that is studied is how many firms must obtain how much of this asset from outside the financial system to … make sure that all debts within the system are settled. The main result is that these liquidity needs are larger when these …

We explore the link between liquidity and investment in a an overlapping generation model with a standard … this asynchronicity, resulting in credit rationing and a net demand for stores of value -- liquidity -- by the corporate … sector. At the heart of the model is a distinction between inside liquidity -- liquidity created within the private sector …

In this paper, we propose a bank-based explanation for the decade-long Japanese slowdown following the asset price …

This paper proposes a theory of corporate liquidity demand and provides new evidence on corporate cash policies. Firms … specification. We also find weak evidence consistent with our agency-based model of corporate liquidity …

payments and waive debt covenants. Asset sales are an important means of avoiding Chapter 11 reorganization; however, they may …

liquidity to the agent …

more than long-term credit. Firms responded by cutting their short-term loans for liquidity management purposes and …, firms increase cash and cut investment. Thus, trade credit offers a substitute source of liquidity that can insulate some … firms from bank liquidity shocks …