with aggregate risk. The paper starts with a model in which households maximize expected utility over their life cycle …. Instantaneous utility is characterized by constant relative risk aversion. Prudence, a characteristic of the utility function, leads …

savings and portfolio decisions. We develop a non-trivial solution procedure to determine the optimal policies. Our results … reveal that the impact of permanent labor income shocks on both the optimal savings rate and the optimal portfolio share is … response of the savings rate and the portfolio share to a fall in labor income exhibits large heterogeneity across the ratio of …

. This effect of uncertain lifetime on savings may also lead the economy to an equilibrium exhibiting asymptotic growth even …

accounted for. Uncertain lifetime captures not only the risk of mortality, but also the possibility that a promise for a delayed … in frailty (risk of mortality) accommodates diminishing impatience, even in the presence of stationarity and time …

income and induces precautionary savings …

and time allocation. Our four main findings are: (i) subjects exercise more effort under certainty than under risk; (ii …) savings are strictly positive for at least 85 percent of subjects (iii) a majority of subjects uses time allocation to smooth …

. This paper examines the determination of precautionary saving when people have access to intra-family risk sharing. I show …, risk sharing between risk averse spouses. The more altruistic the couple is, the closer is the solution to the efficient … one. Also welfare and savings effects from social insurance turn out to be sensitive to assumptions about family structure …

The paper reexamines the ethics of intergenerational risk. When risk re-solves gradually, earlier decisions cannot …, the intensity of risk, and the way risk resolves over time. The characterized class of reference-dependent utilitarian … welfare criteria: (i) disentangle aversion to intergenerational inequality from aversion to risk; (ii) value an early …