Precautionary saving: A taxonomy of prudence
Economics Letters, 2017, vol. 150, issue C, pages 18-20
We extend Gunning (2010) by analyzing the effect of risk on saving. We derive a general prudence index that determines the threshold for the future risk that makes saving increase. We relate our results to the utility premium of Friedman–Savage.
Keywords: Precautionary saving; General prudence index; Utility premium (search for similar items in EconPapers)
JEL-codes: D81 E21 (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:eee:ecolet:v:150:y:2017:i:c:p:18-20
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