Natural borrowing limit

A borrowing limit is the amount of money that individuals could borrow from other individuals, firms, banks or governments.There are many types of borrowing limits, and a natural borrowing limit is one specific type of borrowing limit among those.When individuals are said to face the natural borrowing limit, it implies they are allowed to borrow up to the sum of all their future incomes.A natural debt limit and a natural borrowing constraint are other ways to refer to the natural borrowing limit. A borrowing limit is the amount of money that individuals could borrow from other individuals, firms, banks or governments.There are many types of borrowing limits, and a natural borrowing limit is one specific type of borrowing limit among those.When individuals are said to face the natural borrowing limit, it implies they are allowed to borrow up to the sum of all their future incomes.A natural debt limit and a natural borrowing constraint are other ways to refer to the natural borrowing limit. Although the concept is widely discussed in the economic literatures, it is less likely to observe lenders willing to lend up to the natural borrowing limit.In the real economic activities, borrowing limits are usually much more tighter than the natural borrowing limit due to the immature financial systems of the economyor the gap between the amount of information that the borrowers and lenders have(The latter is usually referred to as an asymmetric information problem).