Do Liquidity Constraints Vary over Time? Evidence from Survey and Panel Data
Much empirical work has been devoted to estimating the proportion of liquidity constrained consumers (P) and the fraction of income held by these liquidity constrained consumers (L). A common feature of these studies is that P and L are taken to be constant over time. This paper attempts to determine whether this assertion is empirically justified by providing new evidence on the extent of liquidity constraints. Using survey and panel data, the authors find that P and L do vary over time with trend and cyclical components, but that, over the period 1968-82, these fluctuations have not been dramatic. Copyright 1990 by Ohio State University Press.
Volume (Year): 22 (1990)
Issue (Month): 2 (May)
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