How does risk affect saving? Empirical work typically examines the effects of detectible differences in risk within the … data. How these differences affect saving in theoretical models depends on the metric one uses for risk. For labor …-income risk, second-degree increases in risk require prudence to induce increased saving demand. However, prudence is not …

and the pure time discount rate, there is distributional neutrality between the two periods. Otherwise, changes of risk …We show how optimal saving in a two-period model is affected when prudence and risk aversion of the underlying utility … function change. Increasing prudence alone will induce higher savings only if, for certain combinations of the interest rate …

below-ground wealth, complemented by additional precautionary savings at initial times to build up a small liquidity fund to …

how lottery prizes are spent and saved over time. We find that spending spikes in the year of winning, and reverts to … motive can account for both the time profile of consumption responses and their systematic co-variation with observables …

We use the Italian Survey of Household Income and Wealth, a rather unique dataset with a long time dimension of panel … contained in the joint dynamics of income, consumption and wealth to quantify the degree of insurance against income risk. The …

We analyse optimal saving of risk-averse households when labour income stochastically jumps between two states. The … generalized Keynes-Ramsey rule includes a precautionary savings term. A phase diagram analysis illustrates consumption and wealth …