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.


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