Borrowing constraint

Borrowing constraint is a restriction on the amount a person can borrow from financial institutions, limiting that person's ability to spend his or her future income today; also called a liquidity constraint.

Definition

According to Macroeconomics by Mankiw (7th edition),

Borrowing constraint. A restriction on the amount a person can borrow from financial institutions, limiting that person's ability to spend his or her future income today; also called a liquidity constraint.