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Precautionary Wealth Accumulation

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  • Mark Huggett

Abstract

When does an individual's expected wealth accumulation profile increase as earnings risk increases? This paper answers this question for multi-period models where earnings shocks are independent over time. Sufficient conditions are stated in terms of properties of a decision rule for savings and, alternatively, in terms of properties of preferences. Copyright 2004, Wiley-Blackwell.

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File URL: http://hdl.handle.net/10.1111/j.1467-937X.2004.00303.x
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Bibliographic Info

Article provided by Oxford University Press in its journal The Review of Economic Studies.

Volume (Year): 71 (2004)
Issue (Month): 3 ()
Pages: 769-781

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Handle: RePEc:oup:restud:v:71:y:2004:i:3:p:769-781

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Cited by:
  1. repec:hal:wpaper:halshs-00585994 is not listed on IDEAS
  2. Luc Arrondel & Hector Calvo Pardo, 2008. "Les Français sont-ils prudents ? Patrimoine et risque sur les revenus des ménages," PSE Working Papers, HAL halshs-00585994, HAL.
  3. Sattinger, Michael, 2011. "The Markov consumption problem," Journal of Mathematical Economics, Elsevier, Elsevier, vol. 47(4-5), pages 409-416.
  4. Richard M. H. Suen, 2011. "Concave Consumption Function and Precautionary Wealth Accumulation," Working papers, University of Connecticut, Department of Economics 2011-23, University of Connecticut, Department of Economics.
  5. Scott Fulford, 2012. "The precaution of the rich and poor," Boston College Working Papers in Economics, Boston College Department of Economics 814, Boston College Department of Economics.
  6. Huggett, Mark & Vidon, Edouard, 2002. "Precautionary wealth accumulation: a positive third derivative is not enough," Economics Letters, Elsevier, Elsevier, vol. 76(3), pages 323-329, August.
  7. Agustin Roitman, 2011. "Precautionary Savings in a Small Open Economy Revisited," IMF Working Papers, International Monetary Fund 11/253, International Monetary Fund.
  8. Martin Kaae Jensen, 2012. "Distributional Comparative Statics," Discussion Papers, Department of Economics, University of Birmingham 12-08, Department of Economics, University of Birmingham.
  9. Morissette, Rene & Ostrovsky, Yuri, 2005. "The Instability of Family Earnings and Family Income in Canada, 1986 to 1991 and 1996 to 2001," Analytical Studies Branch Research Paper Series, Statistics Canada, Analytical Studies Branch 2005265e, Statistics Canada, Analytical Studies Branch.
  10. Carroll, Christopher D. & Kimball, Miles S., 2006. "Precautionary Saving and Precautionary Wealth," CFS Working Paper Series, Center for Financial Studies (CFS) 2006/02, Center for Financial Studies (CFS).
  11. Christos Koulovatianos & Leonard J. Mirman & Marc Santugini, 2007. "Optimal Growth and Uncertainty: Learning," Cahiers de recherche 07-05, HEC Montréal, Institut d'économie appliquée, revised Feb 2008.
  12. Daron Acemoglu & Martin Kaae Jensen, 2012. "Robust Comparative Statics in Large Dynamic Economies," Levine's Working Paper Archive 786969000000000507, David K. Levine.
  13. Gilles Joseph & Thomas Weitzenblum, 2003. "Optimal Unemployment Insurance: Transitional Dynamics vs. Steady State," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 6(4), pages 869-884, October.

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