The effect of future income uncertainty in savings decision

Fábio Gomes

Economics Letters, 2008, vol. 98, issue 3, 269-274

Abstract: This paper analyzes consumption and savings decisions in a two-period consumption setting, supposing that future income is uncertain in the sense of Knight (Knight, F., 1921. Risk, uncertainty, and profit (Boston: Houghton Mi2in)). The results imply that uncertainty averse agents save more than risk averse agents.

Date: 2008
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Working Paper: The Effect of Future Income Uncertainty in Savings Decision (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:98:y:2008:i:3:p:269-274

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