A note on a new interpretation for the precautionary saving motive

This paper proposes a new interpretation for the precautionary saving motive: when future income is uncertain, agents increase saving in order to cause a reduction in the disutility due to uncertainty. Furthermore the paper shows that the usual necessary and sufficient condition for precautionary saving is the condition ensuring this effect to occur.

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Year of publication:	2006
Authors:	Menegatti, M.
Institutions:	Facoltà di Economia, Università degli Studi di Parma
Subject:	Precautionary saving \| Risk aversion \| Prudence

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Series:	Economics Department Working Papers.
Type of publication:	Book / Working Paper
Notes:	Number 2006-EP05 8 pages
Classification:	D11 - Consumer Economics: Theory ; D81 - Criteria for Decision-Making under Risk and Uncertainty ; E21 - Consumption; Saving
Source:	RePEc - Research Papers in Economics

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