Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/87061 
Year of Publication: 
2008
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 08-071/2
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
Risk may induce precautionary saving but it can also reduce saving. The theoretical literature recognizes both possibilities, but favors a positive effect (both for developed and developing countries); the empirical literature is divided, reporting (small) positive effects for developed economies and (large) negative effects for developing countries. We show in a 2-period model how the effect of risk on savings depends not only on preferences but also on the type of risk.
Subjects: 
Theory Consumer Economics
Intertemporal Consumer Choice
Microeconomic Analyses of Economic Development
Economic Development
Financial Markets
Saving and Capital Investment
Corporate Finance and Governance
JEL: 
D11
D91
O12
O16
Document Type: 
Working Paper

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