Chah, Eun Young; Ramey, Valerie A.; Starr, Ross M. - 2021
borrowing constraints. In a departure from previous models, the theory shows that liquidity constraints imply a distinctive … intertemporal relationship between durable and nondurable good~ consumption. The presence of binding, liquidity constraints are …. When liquidity constraints are binding, the error correction term will have predictive power for the future change in …