Cash flow effects on economic growth

Abstract

Policy makers have traditionally considered the macroeconomic relations and the variables that can affect the economic objectives that they pursue, s~uch as prices, employment, balance of payments, and economic growth. Recently, microeconomic behavior has also been considered. To complete the analysis, it is necessar'y to include those variables that define the firm's evolution and activities, and cash flow could be this kind of variable to be included in the analysis. The main objective of this paper is to show the relationship between cash flow and one of the final economic policy targets, economic growth. This paper considers the relationship between cash flow and applied economics, then develops the effects of cash flow on economic growth. (JEL: 040) GALIINDO AI~D MENDEZ: CASH FLOW EFFECTS