Discussion Paper Details

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Title: Liquidity-Constrained Households in an Italian Cross-Section

Author(s): Tullio Jappelli and Marco Pagano

Publication Date: August 1988

Keyword(s): Borrowing, Capital Markets, Consumption, Italy and Liquidity Constraints

Programme Area(s): Applied Macroeconomics

Abstract: This paper attempts to evaluate the effects of capital market imperfections on consumer behavior, on the basis of cross-sectional Italian data. We evaluate the difference between desired and observed consumption using a technique proposed by Hayashi. We find that in Italy borrowing constraints are more severe than in the United States, and that they are more stringent for young households, non-home-owners, the unemployed and consumers living in the Southern regions.

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Bibliographic Reference

Jappelli, T and Pagano, M. 1988. 'Liquidity-Constrained Households in an Italian Cross-Section'. London, Centre for Economic Policy Research.