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Franco Modigliani was an Italian-American economist and the recipient of the 1985 Nobel Memorial Prize in Economics. He was a professor at University of Illinois at Urbana–Champaign, Carnegie Mellon University, and MIT Sloan School of Management.
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Precautionary saving is saving that occurs in response to uncertainty regarding future income. The precautionary motive to delay consumption and save in the current period rises due to the lack of completeness of insurance markets. Accordingly, individuals will not be able to insure against some bad state of the economy in the future. They anticipate that if this bad state is realized, they will earn lower income. To avoid adverse effects of future income fluctuations and retain a smooth path of consumption, they set aside a precautionary reserve, called precautionary savings, by consuming less in the current period, and resort to it in case the bad state is realized in the future.
References
- ↑ "Older drivers and automobile safety" (PDF). AARP Public Policy Institute. 2005. Archived (PDF) from the original on 2008-07-19.
- ↑ Hyungsoo Kim; Virginia E. Richardson (November 1, 2006). Driving Cessation and Consumption Expenses in the Later Years. Vol. 61. Oxford University Press. pp. S347–S353. doi:10.1093/geronb/61.6.S347. ISSN 1758-5368. OCLC 4807695406. PMID 17114315. Archived from the original on June 2, 2018.
{{cite book}}:|journal=ignored (help) - ↑ Jonathan D. Fisher; David S. Johnson; Joseph T. Marchand; Timothy M. Smeeding; Barbara B. Torrey (November 1, 2009). Identifying the Poorest Older Americans. Vol. 64B. Oxford University Press. pp. 758–766. doi:10.1093/geronb/gbp022. ISSN 1758-5368. PMID 19359595. Archived from the original on June 5, 2018.
{{cite book}}:|journal=ignored (help) - ↑ Serge Ky; Clovis Rugemintwari; Alain Sauviat (June 1, 2018). Does Mobile Money Affect Saving Behaviour? Evidence from a Developing Country. Vol. 27. Oxford University Press. pp. 285–320. doi:10.1093/jafeco/ejx028. ISSN 1464-3723. Archived from the original on April 24, 2018.
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