CIRJE-F-448 "The Degree of Precautionary Saving: A Reexamination"
Author Name Lee, Jeong-Joon and Yasuyuki Sawada
Date November 2006
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Remarks Subsequently published in Economics Letters, 96(2), 196-201, 2007.

Extending Dynan's methodology (1993), we show that a signiPcant 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.