Abstract

http://ssrn.com/abstract=1884821
 


 



Portfolio Choice and Precautionary Savings


Riccardo Calcagno


EMLYON Business School; Center for Research on Pensions and Welfare Policies (CeRP)

Mariacristina Rossi


University of Rome II - Faculty of Economics


Economics Bulletin, Vol. 31, No. 2

Abstract:     
We study the effect on savings of an increase in the capital risk of the investment opportunities when the representative consumer is allowed to optimally choose her portfolio. Sandmo (1970) and Levhari and Srinivasan (1969) prove that individuals with high risk-aversion and time-separable, power utility increase their optimal savings when capital risk increases holding constant the expected return of the risky asset. We obtain the opposite effect when the consumer chooses her portfolio allocation optimally.

Number of Pages in PDF File: 9

Keywords: precautionary saving, capital risk

JEL Classification: D91, E21, G11

Accepted Paper Series


Download This Paper

Date posted: July 13, 2011  

Suggested Citation

Calcagno, Riccardo and Rossi, Mariacristina, Portfolio Choice and Precautionary Savings. Economics Bulletin, Vol. 31, No. 2. Available at SSRN: http://ssrn.com/abstract=1884821

Contact Information

Riccardo Calcagno (Contact Author)
EMLYON Business School ( email )
23 Avenue Guy de Collongue
Ecully, 69132
France
Center for Research on Pensions and Welfare Policies (CeRP) ( email )
Via Real Collegio, 30
Moncalieri, TO 10024
Italy
Mariacristina Rossi
University of Rome II - Faculty of Economics ( email )
Via Columbia n.2
Rome, rome 00100
Italy
Feedback to SSRN


Paper statistics
Abstract Views: 207
Downloads: 37

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.797 seconds