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Published in 2017 at "Economics Letters"
DOI: 10.1016/j.econlet.2016.10.029
Abstract: We extend Gunning (2010) by analyzing the effect of risk on saving. We derive a general prudence index that determines the threshold for the future risk that makes saving increase. We relate our results to…
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Keywords:
prudence;
saving taxonomy;
taxonomy prudence;
precautionary saving ... See more keywords
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Published in 2018 at "Review of Economic Dynamics"
DOI: 10.1016/j.red.2017.12.004
Abstract: Under what conditions does an increase in the future income risk (in the sense of second order stochastic dominance) result in an increase in savings? This paper establishes a novel sufficient condition for the case…
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Keywords:
markovian earnings;
earnings environment;
saving markovian;
precautionary saving ... See more keywords