Precautionary saving: A taxonomy of prudence

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• 作者：Marcos Vergara ^{marcosvergara@udd.cl}
• 关键词：D81 ; E21
• 刊名：Economics Letters
• 出版年：2017
• 出版时间：January 2017
• 年：2017
• 卷：150
• 期：Complete
• 页码：18-20
• 全文大小：360 K
• 卷排序：150

文摘

We provide necessary and sufficient conditions on preferences to guarantee a precautionary effect. We derive a general prudence index. For the special cases of labor income risk and wealth risk, the general index is reduced to prudence and relative prudence. For the cases of asset risk and capital risk the general index is reduced to partial prudence. The precautionary effect arises if the utility premium is decreasing in saving.