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Relative risk aversion: increasing or decreasing?


  • Graves, Philip E.


While there is no abstract for this paper, it makes an argument that relative risk aversion is decreasing in wealth rather than increasing in wealth as hypothesized by Arrow, using the money demand findings of Friedman.

Suggested Citation

  • Graves, Philip E., 1979. "Relative risk aversion: increasing or decreasing?," MPRA Paper 19909, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:19909

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    References listed on IDEAS

    1. Milton Friedman, 1959. "The Demand for Money: Some Theoretical and Empirical Results," NBER Chapters,in: The Demand for Money: Some Theoretical and Empirical Results, pages 1-29 National Bureau of Economic Research, Inc.
    2. Graves, Philip E, 1978. "New Evidence on Income and the Velocity of Money," Economic Inquiry, Western Economic Association International, vol. 16(1), pages 53-68, January.
    3. Graves, Philip E, 1976. "Wealth and Cash Asset Proportions," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 8(4), pages 487-496, November.
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    Cited by:

    1. Graves, Philip E, 1980. "The Velocity of Money: Evidence for the U.K., 1911-1966," Economic Inquiry, Western Economic Association International, vol. 18(4), pages 631-639, October.
    2. Chaigneau, Pierre, 2013. "Explaining the structure of CEO incentive pay with decreasing relative risk aversion," Journal of Economics and Business, Elsevier, vol. 67(C), pages 4-23.
    3. Sun, Qian & Tong, Wilson H.S., 2010. "Risk and the January effect," Journal of Banking & Finance, Elsevier, vol. 34(5), pages 965-974, May.

    More about this item


    relative risk aversion; portfolio analysis; money demand; cash proportions; velocity of money;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance


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