The budget constraint requires that, eventually, consumption must adjust fully to any permanent shock to income …

saving motive by eliciting subjective expectations on future consumption. We find that expected consumption risk is higher … expectations (rather than consumption realizations, as in the existing literature) in an Euler equation for consumption, and … estimate the degree of prudence by associating expected consumption risk with expected consumption growth. Robust OLS and IV …

saving motive by eliciting subjective expectations on future consumption. We find that expected consumption risk is higher … expectations (rather than consumption realizations, as in the existing literature) in a Euler equation for consumption, and … estimate the degree of prudence by associating expected consumption risk with expected consumption growth. Robust OLS and IV …

saving motive by eliciting subjective expectations on future consumption. We find that expected consumption risk is higher … expectations (rather than consumption realizations, as in the existing literature) in a Euler equation for consumption, and … estimate the degree of prudence by associating expected consumption risk with expected consumption growth. Robust OLS and IV …