DP257 Liquidity-Constrained Households in an Italian Cross-Section

Author(s):	Tullio Jappelli, Marco Pagano
Publication Date:	August 1988
Keyword(s):	Borrowing, Capital Markets, Consumption, Italy, Liquidity Constraints
JEL(s):	122, 315, 921
Programme Areas:	Applied Macroeconomics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=257

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.