Precautionary wealth accumulation: A positive third derivative is not enough
type: Item
instance of: scholarly article
title: Precautionary wealth accumulation: A positive third derivative is not enough
zbMATH Open document ID: 1011.91031
DOI: 10.1016/S0165-1765(02)00061-7
author: Mark Huggett
author: Edouard Vidon
published in: Economics Letters
publication date: 2002-08-13T00:00:00Z
review text: It is commonly conjectured that expected wealth accumulation increases when earnings risk increases as long as the utility function in each period is increasing, concave and has a positive third derivative. We present a counter example which highlights the importance of the convexity of the savings function.
Mathematics Subject Classification ID: 91B26
Mathematics Subject Classification ID: 91B30
zbMATH DE Number: 1780561
zbMATH Keywords: precautionary wealth
zbMATH Keywords: earnings risk
zbMATH Keywords: savings function
MaRDI profile type: Publication
cites work: On the Concavity of the Consumption Function
cites work: Optimal Consumption Policy under Uncertain Income
cites work: Optimal Consumption with a Stochastic Income Stream
cites work: The effect on optimal consumption on increased uncertainty in labor income in the multiperiod case
cites work: An income fluctuation problem
cites work: Permanent and transitory income effects in a model of optimal consumption with wage income uncertainty
cites work: Precautionary Savings and the Permanent Income Hypothesis
description: scientific article; zbMATH DE number 1780561