precautionary saving motive in a two-period model with Kreps-Porteus preferences. For small risks, we derive a measure of the … strength of the precautionary saving motive, which generalizes the concept of ‘prudence’ introduced by Kimball (1990b). For … large risks, we show that decreasing absolute risk aversion guarantees that the precautionary saving motive is stronger than …

, agents’ prior beliefs are endogenously heterogeneous. Finally, in a consumption-saving problem with stochastic income, agents … problem, agents overestimate the return on their investment and exhibit a preference for skewness. In general equilibrium …

us to reject this view. In fact, a net capital inflow made possible to meet the demand for investment boosting economic …

been significant changes in saving and investment patterns across the world and imbalances have narrowed considerably. Does …

SAVING DOES NOT EQUAL INVESTMENT John Maynard Keynes confused economists and politicians all over the world when he … wrote, “Saving is necessary to equal investment” together with a few equations to confirm his idea and finally concluding … that S = I. There have been repeated discussions about how saving can equal investment, accidentally or with certainty. We …

correlation between the return on housing investment and consumption not only implies positive relationship between the portfolio … share of housing investment and excess return but also renders the housing wealth inappropriate in consumption smoothing. We …A house is generally considered as a 'roof over one's head', however, housing can be regarded as an investment or asset …

have an incentive to signal that he is in great need by saving more than he otherwise would have done. …

of liquid and illiquid personal sector wealth, it is difficult to explain aggregate consumer spending and saving …, consumers’ demand for credit, and the broad money holdings of households. Behavioural equations for these variables are key …

The Paper reviews the literature on these tax incentives, with special focus on long-term saving, housing, and … household liabilities. The Paper addresses several areas of policy intervention: (1) the interest rate effect on personal saving …; (2) the effect of tax incentives on long-term mandatory saving programmes; (3) government programmes that target saving …

social security benefits per retiree. The response of equilibrium tax rates to demographic shocks reduces old-age consumption …