Abstracts » Economics

Saving and capital market imperfections: the Italian experience

Article Abstract:

The high saving rate in Italy could be due to imperfections in the credit and insurance market, which cause liquidity restrictions on households and therefore force saving rates up. The connection between expansion and capital market imperfections may also be the reason behind the rapid fall in the saving rate in Italy in the 1980s, rather than other factors such as bequests, informal financial arrangements and the influence of the public sector. It is likely that European financial integration will cause the Italian saving rate to become more closely aligned with trends in other leading industrial nations.

Italy

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Earnings uncertainty and precautionary saving

Article Abstract:

A study was conducted to examine earnings uncertainty and precautionary saving. The study was based on data from the 1989 Italian Survey of Household Income and Wealth. Results show that relationship between uncertainty and wealth accumulation supplement the precautionary saving theory. However, only minimal explanation for savings is developed. The results imply the influence of other factors, such as health andmortality risks, in determining wealth holdings.

Economic aspects, Wages, Wages and salaries, Uncertainty

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Income risk, borrowing constraints, and portfolio choice

Article Abstract:

Uninsurable income risk and future borrowing constraints tend to decrease the financial assets of a household. Investors are found to diminish their risky assets in the face of uninsurable income risk. Data from the 1989 Bank of Italy Survey of Household Income and Wealth show that Italian households' risky assets form only a fraction of their wealth due to highly erratic returns, transaction costs and control of security markets, among others.

Research, Finance, Risk (Economics), Income, Loans, Households

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