can choose to pay with either cash or credit. This framework predicts that the current level of the stock of cash … determines whether the agent uses cash or credit. Cash is used whenever the agent has enough of it, credit is used when cash … average share of expenditures paid in cash depend on the opportunity cost of cash relative to the cost of credit. The model …

cash reserves or bank lines of credit. Banks create liquidity for firms by pooling their idiosyncratic risks. As a result …, firms with high aggregate risk find it costly to get credit lines from banks and opt for cash reserves in spite of higher … have a higher ratio of cash reserves to lines of credit, controlling for other determinants of liquidity policy. This …

can choose to pay with either cash or credit. This framework predicts that the current level of the stock of cash … determines whether the agent uses cash or credit. Cash is used whenever the agent has enough of it, credit is used when cash … average share of expenditures paid in cash depend on the opportunity cost of cash relative to the cost of credit. The model …

cash reserves or bank lines of credit. Banks create liquidity for firms by pooling their idiosyncratic risks. As a result …, firms with high aggregate risk find it costly to get credit lines from banks and opt for cash reserves in spite of higher … have a higher ratio of cash reserves to lines of credit, controlling for other determinants of liquidity policy. This …

reacting to more difficult access to credit by increasing their precautionary cash buffers. …