Uninsured idiosyncratic risk and aggregate saving
AbstractWe find that precautionary saving accounts for only a modest (less than 3 percentage point) increase in the aggregate saving rate, at least for moderate and empirically plausible parameter values. This finding is based on a quantitative analysis of a reasonably parameterized version of the standard growth model modified to include a large number of agents who receive uninsured idiosyncratic labor endowment shocks. In contrast to representative agent models, asset trading is quite important to individuals. The model can also account qualitatively for the positive skewness of wealth and income distributions, and significantly greater wealth inequality compared to income inequality.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Federal Reserve Bank of Minneapolis in its series Working Papers with number 502.
Date of creation: 1993
Date of revision:
Publication status: Published in Quarterly Journal of Economics (Vol. 109, No. 3, August 1994, pp. 659-684)
Other versions of this item:
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Why recent tax rebates did not work
by Economic Logician in Economic Logic on 2010-05-18 13:57:00
- Liquidity Premia and the Monetary Policy Trap
by Stephen Williamson in Stephen Williamson: New Monetarist Economics on 2013-11-27 21:52:00
RePEc Biblio mentionsAs found on the RePEc Biblio, the curated bibliography for Economics:
- > Schools of Economic Thought, Epistemology of Economics > Economic Methodology > Dynamic Stochastic General Equilibrium
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading lists or Wikipedia pages:
- Recursive Macroeconomic Theory
- Top 1 items by number of citations
- Top 1 items by number of citations weighted by simple impact factors
- Top 1 items by number of citations weighted by recursive impact factors
- Top 1 items by number of citations discounted by age
- Top 1 items by number of citations weighted by simple impact factors and discounted by age
- Top 1 items by number of citations weighted by recursive impact factors and discounted by age
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Janelle Ruswick).
If references are entirely missing, you can add them using this form.