first one, or the introduction of additional risks beyond a first risk, can actually reduce the precautionary saving motive …, because the new constraint or risk can hide' the effects of the preexisting constraints or risks …

precautionary saving motive, or prudence, can cause an agent to respond to a risk by accumulating more wealth. (II.) The desire to … moderate total exposure to risk, or temperance, can cause an agent to respond to an unavoidable risk by reducing exposure to … liquidity can cause an agent to respond to a risk by holding more money …

consumption. It is also a component of the interest elasticity of consumption and the risk aversion of the value function which … function, income risk is found to raise the marginal propensity to consume out of wealth in a multiperiod model with many risky …

The theory of precautionary saving is shown in this paper to be isomorphic to the Arrow-Pratt theory of risk aversion …, to the theory of optimal choice under risk. In particular, a measure of the strength of precautionary saving motive …, making possible the application of a large body of knowledge about risk aversion to precautionary saving, and more generally …