, infinitely-lived agents face occasionally binding borrowing constraints and store wealth to smooth out idiosyncratic income … consumption. The implied higher stock of liquidity also loosens the borrowing constraints faced by firms, thereby raising labour …

borrowing constraints. Agents are subject to both aggregate and idiosyncratic income shocks, which latter may force them into …

heterogeneous agents and borrowing constraints. Agents di¤er in their initial wealth, felicity functions and discount factors. For …

that incorporates both borrowing constraints and a `consumption' value of schooling – two of the most commonly invoked … explanations for a positive family income - schooling relationship. Without borrowing constraints, the model cannot explain the …

and Hopenhayn (2006) to change its long-run implications so that firm growth and exit driven by borrowing constraints …

is commonly interpreted as evidence for a tightening of borrowing constraints. This paper asks whether this is indeed the …

and Hopenhayn (2006) to change its long-run implications so that firm growth and exit driven by borrowing constraints …

borrowing. Keywords: capital flows, asset prices, domestic and international borrowing constraints JEL Classifications: F32 …�edbytheincrease in asset price that further loosens the borrowing constraints. But when the domestic �nancial system is poor, the boom is … constraint, ct = wtlt bt b t + bt+1r t + b t+1 r ; and the borrowing constraints, bt+1 0; and b t+1 0: We assume u( ) is …