Standard transaction cost arguments can only partially explain why the share of cash transactions is still high in many countries. This paper shows that consumers’ desire to monitor liquidity is one of the reasons. Consumers make use of a distinctive feature of cash – a glance into one’s...

The interpretation of the significant relation between business investment spending and cash flow has been controversial. A large body of research has found that investment/cash flow sensitivities are higher for financially constrained firms. This fundamental result underlying the finance...