Precautionary Motives for Holding Assets

Miles Kimball

No 3586, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: At least three types of precautionary motives are directly relevant to an agent's demand for assets. (I.) The precautionary saving motive, or prudence, can cause an agent to respond to a risk by accumulating more wealth. (II.) The desire to moderate total exposure to risk, or temperance, can cause an agent to respond to an unavoidable risk by reducing exposure to other risks even when the other risks are statistically independent of the first. (III.) The precautionary demand for liquidity can cause an agent to respond to a risk by holding more money.

Date: 1991-01
Note: ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (47)

Published as New Palgrave Dictionary of Money and Finance, (London: MacMillan Press: 199 2) and (New York: Stockton Publishers: 1992);, Volume 3, pp. 158-161

Downloads: (external link)
http://www.nber.org/papers/w3586.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:3586

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w3586

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().