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In fifteen European countries, China, and the US, stocks and business equity as a share of total household assets are represented by an increasing and convex function of income/wealth. A parsimonious model fitted to the data shows why background labor-income risk can explain much of this...
Persistent link: https://www.econbiz.de/10012251025
Persistent link: https://www.econbiz.de/10008477283
In fifteen European countries, China, and the US, stocks and business equity as a share of total household assets are represented by an increasing and convex function of income/wealth. A parsimonious model fitted to the data shows why background labor-income risk can explain much of this...
Persistent link: https://www.econbiz.de/10012254821
This paper identifies a new sufficient condition for a prudent agent to have positive precautionary saving in the presence of labor income and interest rate risks of any size. We also provide three economic interpretations for this condition focusing respectively on the marginal effect of saving...
Persistent link: https://www.econbiz.de/10011263406
increase saving in order to cause a reduction in the disutility due to uncertainty. Furthermore the paper shows that the usual …
Persistent link: https://www.econbiz.de/10005772851
This paper shows how, under a few standard assumptions on the utility function, the monotonicity of absolute risk aversion (ARA) and of absolute prudence (AP) are connected. We get some general Propositions on the behaviour of the two functions regarding the positions and the number of their...
Persistent link: https://www.econbiz.de/10005248549
Persistent link: https://www.econbiz.de/10009764763
This paper proposes a formal model of migration in which workers are heterogeneous and markets are stochastically correlated. We derive and characterize the optimal migration pattern. It is shown to depend on differences in expected earnings, costs of migration, income risks, and more...
Persistent link: https://www.econbiz.de/10014035466
Using detailed micro-data, this paper documents that households with lower income risk (and higher income levels) exhibit a higher Marginal Propensity to Consume (MPC) in response to transitory income shocks, all else being equal. This finding is particularly significant among unconstrained...
Persistent link: https://www.econbiz.de/10014482888
question of primary concern is: what impact, if any, does the presence of income uncertainty have on the structure of Dutch … portfolios become less risky as income uncertainty increases. …
Persistent link: https://www.econbiz.de/10011092162