Corporate Cash Balances and Economic Activity
With an Address by Governor Kevin M. Warsh of the Federal Reserve

Corporations built up an extraordinary level of cash reserves during the current expansion. Firms have only recently started to draw down their substantial cash holdings through accelerated shareholder payouts, cash-financed mergers and acquisitions, and increased investment. These developments highlight the strong interest that economists and policymakers have in the interaction between cash balances and investment spending. But what is the link between cash and investment? Has the relationship changed over time? Following an address on the recent build-up of corporate cash balances and the state of corporate balance sheets by Governor Kevin M. Warsh of the Federal Reserve, AEI’s Kevin A. Hassett will present a paper, cowritten with Kathryn Newmark, which investigates the effects of liquidity and taxes on investment. A panel of experts will respond.

About the Author

 

Kevin A.
Hassett
  • Before joining AEI, Mr. Hassett was a senior economist at the Board of Governors of the Federal Reserve System and an associate professor of economics and finance at the Graduate School of Business of Columbia University, as well as a policy consultant to the Treasury Department during the George H. W. Bush and Clinton administrations. He served as an economic adviser to the George W. Bush 2004 presidential campaign and as Senator John McCain's chief economic adviser during the 2000 presidential primaries. He also served as a senior economic adviser to the McCain 2008 presidential campaign. Mr. Hassett is a columnist for National Review.

  • Phone: 202-862-7157
    Email: khassett@aei.org
  • Assistant Info

    Name: Veronika Polakova
    Phone: 202-862-4880
    Email: veronika.polakova@aei.org

 

Phillip
Swagel
  • Phillip Swagel, an economist and academic, was assistant secretary for economic policy at the Treasury Department from 2006 to 2009, where he was responsible for analysis on a wide range of economic issues, including policies relating to the financial crisis and the Troubled Asset Relief Program. He has also served as chief of staff and senior economist at the White House Council of Economic Advisers and as an economist at the Federal Reserve Board and the International Monetary Fund. He is concurrently a professor of international economics at the University of Maryland's School of Public Policy.  He has previously taught at Northwestern University, the University of Chicago’s Booth School of Business, and Georgetown University. Mr. Swagel works on both domestic and international economic issues at AEI.  His research topics include financial markets reform, international trade policy, and the role of China in the global economy.
  • Phone: 2026874869
    Email: pswagel@aei.org
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