C. Meghir et G. Weber, INTERTEMPORAL NONSEPARABILITY OR BORROWING RESTRICTIONS - A DISAGGREGATE ANALYSIS USING A US CONSUMPTION PANEL, Econometrica, 64(5), 1996, pp. 1151-1181
Citations number
34
Categorie Soggetti
Economics,"Social Sciences, Mathematical Methods","Mathematical, Methods, Social Sciences","Statistic & Probability","Mathematics, Miscellaneous
We propose a method to test for liquidity constraints which relies on
using the within period marginal rate of substitution condition as a b
enchmark to evaluate the intertemporal Euler equation. If spot markets
for nondurable goods exist, but financial markets either do not exist
, or are imperfect, we show how the comparison of first order conditio
ns involving the relevant spot and intertemporal prices can be used to
detect the imperfection. We apply our methodology to a large sample o
f U.S. households, drawn from twelve years of the Consumer Expenditure
Survey, allowing for a general nonseparable preference structure. Our
estimates of first order conditions do not indicate the presence of l
iquidity constraints, with the possible exception of young households.