Five Facts About the Money Holdings of Individuals and Firms

53 Pages Posted: 28 Sep 2022

See all articles by Sebastien Betermier

Sebastien Betermier

McGill University - Desautels Faculty of Management

Laurent E. Calvet

EDHEC Business School; CEPR

Jens Soerlie Kvaerner

Tilburg University

Date Written: September 19, 2022

Abstract

Using administrative panels from Norway and the Netherlands and the US Survey of Consumer Finances, we document five facts about the cash share -- the ratio of money holdings to financial wealth -- held by individuals and firms. (i) Deposit rates and the aggregate cash shares of individuals and firms have decreased substantially since the 1990's. (ii) The decline in individuals' aggregate cash share is driven by the wealthiest 10%. (iii) Deposit rates predict the wealthy's cash share. (iv) Interest income no longer represents a significant proportion of income for wealthy individuals. (v) Firms exhibit similar moneyholding dynamics as individuals.

Keywords: Money demand, household finance, corporate cash holdings, portfolio choice, low interest rates.

JEL Classification: E41, G11, G32, G51.

Suggested Citation

Betermier, Sebastien and Calvet, Laurent E. and Soerlie Kvaerner, Jens, Five Facts About the Money Holdings of Individuals and Firms (September 19, 2022). Available at SSRN: https://ssrn.com/abstract=4224211 or http://dx.doi.org/10.2139/ssrn.4224211

Sebastien Betermier

McGill University - Desautels Faculty of Management ( email )

1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1
Canada

Laurent E. Calvet (Contact Author)

EDHEC Business School ( email )

16 rue du Quatre Septembre
Paris, 75002
France

CEPR ( email )

33 Great Sutton Street
London, EC1V 0DX
United Kingdom

Jens Soerlie Kvaerner

Tilburg University ( email )

Warandelaan 2
Tilburg, -- 4818HK
Norway
40242704 (Phone)
0364 (Fax)

HOME PAGE: http://www.jenskvaerner.com/

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