The paper studies identification in heterogeneous agent economies utilizing restrictions that are consistent with alternative mechanisms. These restrictions generate moment inequalities and therefore set identification. Employing aggregated survey data that are informative about the extensive margin of adjustment i.e. the proportion of agents whose behavior is distorted over time due to financial frictions , can provide additional informationthat can tighten the corresponding bounds. The paper provides identification analysis, simulation evidence and an application using Spanish data where the borrowing constrained are identified by combining information from different surveys  .
Identification in heterogeneous agent economies can be obtained by utilizing restrictions which are consistent with alternative mechanisms. Survey data that are informative about the proportion of agents whose behavior is distorted due to financial frictions provides additional information. The latter can shrink the set of admissible models and preference parameter values. This paper provides identification analysis, simulation evidence and an application using Spanish data where the borrowing constrained are identified by combining information from different surveys . Results suggest that incomplete markets can potentially rationalize the gap between micro and macro elasticities for aggregate consumption and labor supply .
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The paper studies identification
Identification
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utilizing restrictions that
can be obtained by utilizing restrictions which
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These restrictions generate moment inequalities and therefore set identification. Employing aggregated survey
Survey
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extensive margin of adjustment i.e. the
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over time
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, can provide additional informationthat can tighten the corresponding bounds. The
provides additional information. The latter can shrink the set of admissible models and preference parameter values. This
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. Results suggest that incomplete markets can potentially rationalize the gap between micro and macro elasticities for aggregate consumption and labor supply