Explicit Lagrange Multiplier for Firms Facing a Debt Ceiling Constraint

Jean-Bernard Chatelain

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Abstract: 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 to check for misspecification of the parameterizations of these Lagrange multipliers used in Euler investment equations tests during the 1990's.

Keywords: Investment; Credit Rationing (search for similar items in EconPapers)
Date: 2000
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00119408
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Published in Economics Letters, 2000, 67 (2), pp.153-158. ⟨10.1016/S0165-1765(99)00270-0⟩

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Working Paper: Explicit Lagrange Multiplier for Firms Facing a Debt Ceiling Constraint (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00119408

DOI: 10.1016/S0165-1765(99)00270-0

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