Working Papers, Konjunkturinstitutet - National Institute of Economic Research
The Effect of Precautionary Saving on Consumption in Sweden
Abstract: Uncertainty concerning future income lowers consumption.
This is often called the precautionary demand for savings. In this paper
the existence of precautionary saving is investigated using Swedish data
for the years 1973-1992. As there are no variables for consumers'
uncertainty we use proxies. Assuming different underlying distributions of
attitudinal data we have a set of variance series. Including the proxies in
different specifications of the consumption function, indication of
precautionary saving can be found. No uncertainty would raise consumption
Keywords: Precautionary saving; consumption; uncertainty; econometric modelling; cointegration.; (follow links to similar papers)
JEL-Codes: C32; E21; (follow links to similar papers)
26 pages, December 1, 1997
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