Baiardi, Donatella; Magnani, Marco; Menegatti, Mario - In: Journal of Economics 113 (2014) 3, pp. 211-228
This paper studies precautionary saving when many small risks are considered. We first introduce two simultaneous risks …: labor income and interest rate risks. We show that, in this context, sufficient conditions for precautionary saving are … weaker than in similar models. Moreover, we find that, unlike previous literature, precautionary saving can occur in the case …