higher uncertainty of the income stream increases the precautionary savings motive of households. They have a desire to save … and a precautionary savings motive will lead to procyclical capital outflows at business cycle frequency and a higher long …

higher uncertainty of the income stream increases the precautionary savings motive of households. They have a desire to save … and a precautionary savings motive will lead to procyclical capital out ows at business cycle frequency and a higher long …

-run capital flows in both theory and in the data. For this purpose, we develop a two region overlapping generations model where …

increases households' precautionary savings. In the model, the combination of income risk and the precautionary savings motive …