ABSTRACT
Cash payment commitments on outstanding instruments are contractual commitments (1) to pay interest and repay the principal on debts and (2) to pay dividends-if earned-on equity shares. These cash payment commitments are money flows set up by the financial structure. A structure of expected money receipts underlies the various commitments to make payments on existing debts. Each economic unit-be it a business firm, household, financial institution, or government-· is a money-in-money-out device. The relation among the various sources and uses of cash for the various classes of economic units determines the potential for instability of the economy.
