The Propensity to Borrow out of Expected Permanent Income
One prediction of the Permanent Income Hypothesis is that households who are illiquid may wish to borrow against future income when there is a positive shock to their future income process. We informally model this prediction in a two-period setting and then test it using Equifax data. We demonstrat...
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| Format: | Thesis |
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Massachusetts Institute of Technology
2023
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| Online Access: | https://hdl.handle.net/1721.1/151232 |