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 …

income and induces precautionary savings …

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 …

The existing literature suggests that when the saving decision of two-earner households under risk is analysed …, standard assumptions suffice for precautionary saving to exist under increases in risk of the first and second orders, but not …

-reduction and saving behavior. We use the time-separable discounted expected-utility model and consider income risk, inflation risk …We compile, generalize and extend the results about the comparative static effects of risk changes on optimal risk …, and interest rate risk. For each type of risk, we trace precautionary risk reduction and precautionary saving to the …

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

We show how optimal saving in a two-period model is affected when prudence and risk aversion of the underlying utility … function change. Increasing prudence alone will induce higher savings only if, for certain combinations of the interest rate … and the pure time discount rate, there is distributional neutrality between the two periods. Otherwise, changes of risk …

Precautionary savings occurs in response to uncertainty regarding future income. The precautionary motive to delay … realized, they will earn lower income. To avoid future income fluctuations and smooth consumption, they set aside a …

analyze the determinants of private saving in both country groups. Main results are: saving rates are persistent; income … substitutes. Long-run effects of income growth and public saving are larger in the EU than in the candidate countries, indicating …