Previous tests for liquidity constraints using consumption Euler equations have frequently split the sample on the basis of welath arguing that low wealth consumers are more likely to be constrained. We propose alternative tests using different and more direct information on borrowing...

Previous tests for liquidity constraints using consuption Euler equations have frequently split the sample on the basis of wealth, arguing that low-wealth consumers are likely tp be constrained. We propose alternative tests using different and more direct information on borrowing constraints...