Article ID Journal Published Year Pages File Type
5062798 Economics Letters 2006 6 Pages PDF
Abstract

This paper analyzes the consumption function induced by liquidity constraints under perfect foresight in continuous time, obtaining an analytical expression for the inverse consumption function. Liquidity constraints have dramatic effects on consumption, even long before the constraints bind.

Keywords
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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An analytical solution to the inverse consumption function with liquidity constraints
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