The Degree of Precautionary Saving: A Reexamination

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The Degree of Precautionary Saving: A Reexamination

Author Info

Yasuyuki Sawada (Faculty of Economics, University of Tokyo)
Jeong-Joon Lee (Department of Economics, Towson University)

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Abstract

Extending Dynan's methodology (1993), we show that a significant frac tion of the prudence parameter puzzle can be explained by a downward omitted variable bias. Further, the estimated prudence is substantially higher for liquidity-constrained households.

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Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-448.

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Length: 13pages
Date of creation: Nov 2006
Date of revision:
Handle: RePEc:tky:fseres:2006cf448

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Article
- Lee, Jeong-Joon & Sawada, Yasuyuki, 2007. "The degree of precautionary saving: A reexamination," Economics Letters, Elsevier, vol. 96(2), pages 196-201, August. [Downloadable!] (restricted)

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-11-25 (All new papers)
NEP-MAC-2006-11-25 (Macroeconomics)

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Other versions:
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Other versions:
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