lower consumption and GDP growth. Consistent with a model of precautionary savings in the face of uncertainty, we find for a … panel of advanced economies that greater labor income uncertainty is significantly associated with higher household savings … precautionary savings motive …

We study the effects of permanent and temporary income shocks on precautionary saving and investment in a "store … investment, or a "volatility trap." Namely, big savers invest relatively little. In contrast, low volatility of permanent shocks … leads to low precautionary saving and high or low investment, depending on the volatility of temporary shocks. Empirical …

reallocated from the private to the public sectors, reducing investment and deepening the recessions even further. To account for …. This implies that domestic debt purchases displace productive investment. The model shows that these purchases reduce …

interest rate - thus helping to foster investment and growth …