Discussion paper

DP257 Liquidity-Constrained Households in an Italian Cross-Section

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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Citation

Pagano, M and T Jappelli (1988), ‘DP257 Liquidity-Constrained Households in an Italian Cross-Section‘, CEPR Discussion Paper No. 257. CEPR Press, Paris & London. https://cepr.org/publications/dp257