Liquidity Constraint Research Papers - Academia.edu (original) (raw)
In a rational expectation utility optimization model, the consumption profile is smoothed over time and, under some simplifying assumptions, it equals a constant fraction of total lifetime income. For this result to hold, the consumer... more
In a rational expectation utility optimization model, the consumption profile is smoothed over time and, under some simplifying assumptions, it equals a constant fraction of total lifetime income. For this result to hold, the consumer must be able to transfer income from one period to another. Otherwise, the consumer is under liquidity constraints. The liquidity constraint affects the allocation of durable and non-durable consumption. We focus on the relationship between the marginal utility of household durable good stock and the marginal utility of non-durable consumption. When capital markets are perfect, the marginal utility of these two variables always bears an equilibrium relationship. But if liquidity constraints are binding, the difference between the lagged value of these two variables can predict the current growth change in non-durable consumption. We estimate the long-run relationship between these two variables using an error correction model and a pseudo-panel data se...
... Firm investment in imperfect capital markets: A structural estimation. Sangeeta Pratap Corresponding Author Contact Information , E-mail The Corresponding Author , a and Sílvio Rendon E-mail The Corresponding Author , b. ... Agency... more
... Firm investment in imperfect capital markets: A structural estimation. Sangeeta Pratap Corresponding Author Contact Information , E-mail The Corresponding Author , a and Sílvio Rendon E-mail The Corresponding Author , b. ... Agency costs, net worth, and business fluctuations. ...
- by Yonas Alem and +1
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- Economics, Social Sciences, Agricultural Economics, Applied Economics
- by Belén Jerez and +1
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- Macroeconomics, Demand for Money, Economic Theory, Applied Economics
- by Neil Dourmashkin and +1
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- Economics, European Union, Panel Data, Liquidity Constraint
We construct an overlapping−generations experiment to test for two alleged departures from Ricardian equivalence. In the first treatment the setting is close to the theoretical model, while in the second we allow for liquidity−constrained... more
We construct an overlapping−generations experiment to test for two alleged departures from Ricardian equivalence. In the first treatment the setting is close to the theoretical model, while in the second we allow for liquidity−constrained consumers. We then introduce uncertainty on future income for the first generation. Ricardian equivalence is well supported in the baseline experiment and to some extent in the liquidity−constraint case, whereas it is clearly rejected under uncertainty. The authors acknowledge funding provided by the University of Siena.
This paper investigates the reasons that determine students’ mobility in Italy and tries to explain why in the presence of quality differentials among universities the majority of students choose to remain in their regions of origin. We... more
This paper investigates the reasons that determine students’ mobility in Italy and tries to explain why in the presence of quality differentials among universities the majority of students choose to remain in their regions of origin. We find that low mobility is related to family income and other financial and background characteristics. Low mobility in turn implies the existence of
- by Claudio Lupi and +1
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- Higher Education, Liquidity Constraint