New results on precautionary saving under two risks

Marzia De Donno, Donatella Baiardi, Marco Magnani, Mario Menegatti

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

8 Citazioni (Scopus)

Abstract

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 on total income variance, on the sign of the covariance between total income and the return of saving, and on the effect of saving on the utility premium.
Lingua originaleEnglish
pagine (da-a)17-20
Numero di pagine4
RivistaEconomics Letters
Volume130
DOI
Stato di pubblicazionePubblicato - 2015

Keywords

  • Precautionary saving
  • Interest rate risk
  • Utility premium
  • Prudence
  • Labor income risk

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