A new interpretation of the condition for precautionary saving in the presence of an interest-rate risk

Marco Magnani

Journal of Economics, 2017, vol. 120, issue 1, No 5, 79-87

Abstract: Abstract This note reconsiders the classical problem of precautionary saving in the presence of an interest-rate risk, and provides a new interpretation of the threshold of 2 for the relative prudence index, which characterizes the necessary and sufficient condition for precautionary saving.

Keywords: Precautionary saving; Interest rate risk (search for similar items in EconPapers)
JEL-codes: D81 E21 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:120:y:2017:i:1:d:10.1007_s00712-016-0496-2

DOI: 10.1007/s00712-016-0496-2

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