Benigno, Gianluca; Chen, Huigang; Otrok, Christopher M.; … - 2010
This paper analyzes quantitatively the extent to which there is overborrowing (i.e., inefficient borrowing) in a … finding of the analysis is that overborrowing is not a robust feature of this class of model economies: it depends on the … calibration, but overborrowing with more impatient agents and more volatile shocks. Endowment economies display overborrowing …
