's prediction that small firms may be unable to access liquidity when large shocks arrive using data on drawdowns in the COVID … large firms on pre-committed lines of credit. Differences in demand for liquidity cannot fully explain the differences in … and 125 percent of the amount of their PPP funds, suggesting that government-sponsored liquidity can overcome private …

We propose and test a new channel that links funding liquidity risk and interest rates in short-term funding markets …. Borrowers with high liquidity risk are willing to pay a markup to lock in their funding, independent of risk premiums demanded … borrowers' funding liquidity risk that lead to systematic and persistent heterogeneity in funding costs. Our results have …

: undiversifiable interest rate risk and shocks to aggregate liquidity demand. Mutual funds are inefficient when the economy faces … undiversifiable interest rate risk. However, if only aggregate liquidity demand is stochastic, mutual funds can implement the social … optimum even when liquidity demand is not directly observed. …