Explicit Lagrange multiplier for firms facing a debt ceiling 1 constraint *
نویسنده
چکیده
This paper provides the explicit expression of investment facing a binding debt ceiling and the explicit expression of the Lagrange multipliers related to the binding debt ceiling constraint. This result allows us to check for misspecification of the parameterizations of these Lagrange multipliers used in Euler investment equations tests during the 1990’s. 2000 Elsevier Science S.A. All rights reserved.
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