In recent years, the number of downgrades in corporate bond ratings has exceeded the number or upgrades. This fact has led some to conclude that the credit quality of US corporate debt has declined. However, declining credit quality is not the only possible explanation.

In recent years, the number of downgrades in corporate bond ratings has exceeded the number of upgrades, This fact has led some to conclude that the creidt quality of US corporate debt has declined. However, declining credit quality is not the only possible explanation. An alternative...

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...