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The Optimal Amount of Attention to Capital Income Risk and Heterogeneous Precautionary Saving Behavior
Yin, Penghui - 2019
This paper studies attention allocation behavior of rationally inattentive consumers who have CRRA preferences, face uninsured capital income risk, and suffer from an information-processing capacity constraint. For given attention devoted to capital income risk, we solve for the optimal...
Persistent link: https://www.econbiz.de/10012892117
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Theoretical foundations of buffer stock saving
Carroll, Chris - 2011
"Buffer-stock" models of saving are now standard in the consumption literature. This paper builds theoretical foundations for rigorous understanding of the main features of such models, including the existence of a target wealth ratio and the proposition that aggregate consumption growth equals...
Persistent link: https://www.econbiz.de/10009236804
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A Note on Precautionary Savings
Rostom, Ahmed Mohamed - 2011
Precautionary savings occurs in response to uncertainty regarding future income. The precautionary motive to delay …
Persistent link: https://www.econbiz.de/10013117172
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Risk and Saving in Two-Person Households : More Scope for Precautionary Saving
Apps, Patricia F. - 2012
The existing literature suggests that when the saving decision of two-earner households under risk is analysed, standard results on the existence of precautionary saving no longer apply: precautionary saving is obtained if and only if very stringent conditions hold. This paper shows that when...
Persistent link: https://www.econbiz.de/10013099761
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Precautionary Saving and Insurance Under Generalized Mean-Variance Preferences
Branger, Nicole - 2017
at different times gives the optimal savings decision. The results are tractable and easy to interpret …
Persistent link: https://www.econbiz.de/10012959911
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Revisiting Precautionary Saving Under Ambiguity
Peter, Richard - 2018
I study the consumption-saving problem with non-separable utility under ambiguity. Using smooth ambiguity aversion, I show that the introduction of ambiguity and greater ambiguity aversion raise optimal saving. When relative prudence in ambiguity preferences is bounded by 2, also greater...
Persistent link: https://www.econbiz.de/10012916994
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Precautionary risk reduction and saving : Two sides of the same coin?
Peter, Richard; Hofmann, Annette - 2022
We compile, generalize and extend the results about the comparative static effects of risk changes on optimal risk-reduction and saving behavior. We use the time-separable discounted expected-utility model and consider income risk, inflation risk, and interest rate risk. For each type of risk,...
Persistent link: https://www.econbiz.de/10013293191
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The Effect of Time and Ambiguity Preferences on Saving and Insurance
Li, Jingyuan - 2015
In this paper, we study two classical saving-insurance problems for the intertemporal version developed by Hayashi and Miao (2011) of the smooth ambiguity model of Klibanoff et al. (2005). These models put risk, ambiguity and time preferences together in a Kreps-Porteus aggregator, and...
Persistent link: https://www.econbiz.de/10013032945
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Savings, Growth and Capital Markets Imperfections : The Case of Borrowing Constraints
de Gregorio, Jose - 2006
This paper studies the effects that borrowing constraints have on savings and growth and argues that, though they … increase savings, their effect on growth is ambiguous. Empirical evidence on the extent of borrowing constraints as well as … savings, investment, human capital accumulation and growth performance for industrialized countries is presented. A simple …
Persistent link: https://www.econbiz.de/10012781729
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The Welfare Effects of Liquidity Constraints
Jappelli, Tullio; Pagano, Marco - 2008
We analyze the welfare implications of liquidity constraints for households in an overlapping generations model with growth. In a closed economy with exogenous technical progress, liquidity constraints reduce welfare if the economy is dynamically inefficient. But if it is dynamically efficient,...
Persistent link: https://www.econbiz.de/10014206582