CIRJE-F-448 | "The Degree of Precautionary Saving: A Reexamination" |
Author Name | Lee, Jeong-Joon and Yasuyuki Sawada |
Date | November 2006 |
Full Paper | PDF file |
Remarks | Subsequently published in Economics Letters, 96(2), 196-201, 2007. |
Abstract |
Extending Dynan's methodology (1993), we show that a signiPcant frac- tion of the prudence parameter puzzle can be explained by a downward omitted variable bias. Further, the estimated prudence is substantially higher for liquidity-constrained households. |