The DOI matches its Crossref record; 3 of the 3 references it cites were found in a registry or an index.
Consumption and Credit: A Model of Time-Varying Liquidity Constraints
Abstract
This paper studies the optimal consumption behavior of individuals who face borrowing limitations that vary stochastically with their income. This framework is motivated by new empirical evidence that I document in U.S. aggregate data: predictable growth in consumer credit is significantly related to consumption growth, a finding that is inconsistent with existing models of consumer behavior. The time-varying liquidity constraint model considered here correctly predicts two key properties of the U.S. aggregate data: the correlation of consumption growth with predictable credit growth documented in this paper, and the well-known correlation between consumption growth and predictable income growth that has been documented extensively elsewhere.
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Citations
Cites
Financing Constraints and Corporate Investment
Fazzari, S. M., Hubbard, R. G., Petersen, B. C., Blinder, A. S., & Poterba, J. M. (1988) · Brookings Papers on Economic Activity · doi:10.2307/2534426 · Cited by 5,574
Agency Costs, Net Worth, And Business Fluctuations
Bernanke, B., Gertler, M., Bernanke, B., & Gertler, M. (1988) · Unknown · doi:10.22004/ag.econ.292693 · Cited by 4,386
The financial accelerator, and the flight to quality
Bernanke, B., Gertler, M., & Gilchrist, S. (1996) · The Review of Economics and Statistics · doi:10.2307/2109844 · Cited by 2,351
Cited by
Gross, D. B., & Souleles, N. S. (2002) · The Quarterly Journal of Economics · doi:10.1162/003355302753399472 · Cited by 867
A Theory of the Consumption Function, With and Without Liquidity Constraints
Carroll, C. D. (2001) · Journal of Economic Perspectives · doi:10.1257/jep.15.3.23 · Cited by 579
The Declining Equity Premium: What Role Does Macroeconomic Risk Play?
Lettau, M., Ludvigson, S. C., & Wachter, J. A. (2008) · Review of Financial Studies · doi:10.1093/rfs/hhm020 · Cited by 375
Self-citationCan financial innovation help to explain the reduced volatility of economic activity?
Dynan, K. E., Elmendorf, D. W., & Sichel, D. E. (2006) · Journal of Monetary Economics · doi:10.1016/j.jmoneco.2005.10.012 · Cited by 290
Bernheim, B. D., Ray, D., & Yeltekin, S. (2013) · Econometrica · doi:10.3386/w18742 · Cited by 269
Metadata
- Authors
- Ludvigson, S.
- Venue
- Review of Economics and Statistics
- Publisher
- MIT Press - Journals
- Published
- 1999-08
- Volume
- 81
- Issue
- 3
- Pages
- 434-447
- ISSN
- 0034-6535 (ISSN-L)
- 1530-9142
- OpenAlex
- W2009595890
- Cited by
- 262
- References
- 3
- FWCI
- 39.08
- Type
- journal article
- Language
- en
- Open access
- closed
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- Ludvigson, S. (1999). Consumption and Credit: A Model of Time-Varying Liquidity Constraints. Review of Economics and Statistics. https://doi.org/10.1162/003465399558364
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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
