Chah, Eun Young; Ramey, Valerie A; Starr, Ross M - In: Journal of Money, Credit and Banking 27 (1995) 1, pp. 272-87
This paper develops and tests the implications of optimal consumption behavior with borrowing constraints. The theory shows that liquidity constraints imply a distinctive intertemporal relationship between durable and nondurable goods consumption. Binding liquidity constraints appear as part of...