TY  - JOUR
AU  - Kimball,Miles S.
TI  - Precautionary Motives for Holding Assets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3586
PY  - 1991
Y2  - January 1991
UR  - http://www.nber.org/papers/w3586
L1  - http://www.nber.org/papers/w3586.pdf
N1  - Author contact info:
Miles S. Kimball
Department of Economics
University of Michigan
Ann Arbor, MI  48109-1220
Tel: 734/764-2375
Fax: 734/764-2769
E-Mail: mkimball@umich.edu
AB  - At least three types of precautionary motives are directly relevant to an agent's demand for assets. (I.) The precautionary saving motive, or prudence, can cause an agent to respond to a risk by accumulating more wealth. (II.) The desire to moderate total exposure to risk, or temperance, can cause an agent to respond to an unavoidable risk by reducing exposure to other risks even when the other risks are statistically independent of the first. (III.) The precautionary demand for liquidity can cause an agent to respond to a risk by holding more money.
ER  -