Precautionary Wealth Accumulation
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 The Review of Economic Studies Ltd.
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Volume (Year): 71 (2004)
Issue (Month): (07)
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