A recent Wall Street Journal article reported that U.S. companies have been stockpiling cash and cash equivalents. According to the Federal Reserve, cash balances at non-financial companies are at the highest level ($1.84 trillion) since 1952. On a different measure, Cash represents 7% of all assets, the highest level since 1963. What's causing companies to stockpile and how will this affect the economy?

In this edition of Smith Business Close-Up with the University of Maryland’s Robert H. Smith School of Business, Progyan Basu, Tyser Teaching Fellow of Accounting and Information Assurance, discusses how and why businesses are stockpiling cash.