One of the basic motives for saving is the accumulation of wealth to insure future welfare. Both introspection and … extant research on consumption insurance find that people face substantial risks that they do not fairly pool. In theory, the … consumption and wealth accumulation of price-taking households in an economy with incomplete markets differs substantially from …

precautionary saving motive in a two-period model with Kreps-Porteus preferences. For small risks, we derive a measure of the … strength of the precautionary saving motive, which generalizes the concept of ‘prudence’ introduced by Kimball (1990b). For … large risks, we show that decreasing absolute risk aversion guarantees that the precautionary saving motive is stronger than …

, agents’ prior beliefs are endogenously heterogeneous. Finally, in a consumption-saving problem with stochastic income, agents …

future policy reversal lowers the consumption rate of interest and thus will increase current consumption. Furthermore, to …

In this paper we study the transmission of income shocks into nondurable consumption in the presence of durable goods … conventional measures of insurance based on the response of non-durable consumption to income changes. The sign of this bias …

consumption and income over the working lives of typical households across different education and occupation groups. Using these … profiles, we estimate a structural model of optimal life-cycle consumption expenditures in the presence of realistic labour … of expected income. Our methodology provides a natural decomposition of saving into its precautionary and retirement …

economy will be small. In this paper, we quantify the direct effect on real consumption of (1) unanticipated changes in … evaluate the evidence for asymmetries in the response of real consumption that would be expected, for example, if shifting … price shocks on the consumption of new domestically produced automobiles, is consistent with the small share of the U …

and consumption go down as well. Governments can offset terror by putting tax revenues into the production of security …, at the level of the death toll by about the same size as due to car accidents, is expected to decrease annual consumption …

This paper provides instrumental variables estimates of the response of aggregate private consumption to transitory … transitory shocks to aggregate output on private consumption in poor countries. …