Exact(7)
Yuan (2005) observed that the borrowing constraint and information asymmetry cause confusion, crises, and contagion in stock prices.
Yuan (2005) suggested rectification of liquidity crises through government intervention that would reduce the borrowing constraint and information asymmetry on trading.
One way of accounting for this issue is by adding a borrowing constraint to the Hayashi (1982) model (Adda and Cooper 2003).
There are no non-concavities due to borrowing constraints in our model because the only borrowing constraint is generated by the no-bankruptcy condition, which is in effect enforced by having infinite marginal utility of consumption at zero consumption.
In this economy, as income grows all individuals face a less binding borrowing constraint, which in turn results in a better allocation of resources and, thus, in higher income per capita.
If this model is a good approximation for a firm's investment behavior, at each point in time the firm will fall in one of two groups: the group of firms that are financially constrained (borrowing constraint is binding) and the group of firms that are not financially constrained.
Similar(53)
Because of the financial crisis relatively more people face borrowing constraints, which would increase the effectiveness of a tax cut.
But in reality, at a time of borrowing constraints, the government is much likelier to shift expenditure around and avoid spending more, as the NSP decision illustrates.
"Investments from sovereign wealth funds can also bring benefits by relaxing borrowing constraints, reducing the cost of capital for businesses and by improving capital allocation".
In normal times, it may not matter whether the government finances its expenses with taxes or bonds, if government bonds do not relax borrowing constraints.
Any government, whatever its ideological hue, would have been limited by public-sector borrowing constraints, as well as by the fear of industrial unrest.Yet facts alone do not seem enough to win the argument.
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Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com