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Precautionary Motive
(redirected from Precautionary Motives)

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Precautionary motive
A desire to hold cash in order to be able to deal effectively with unexpected events that require cash outlay.
Precautionary Motive
The desire to keep extra money in case an unforeseen situation requires a capital outlay. For example, one may wish to save extra money to pay for medical bills in case of an accident. According to John Maynard Keynes, people keep savings accounts, as well as some stocks and commodities, with a precautionary motive in order to cover unexpected events. See also: Precautionary demand (for money).
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He places sole responsibility for China's soaring saving rate on precautionary motives.
Stephen Roach on the Next Asia: Opportunities and Challenges for a ... by Tan, Cliff / Business Economics
The first two measures will directly boost consumption, and the third will indirectly help to raise consumption by allaying the widespread precautionary motives that lead to excessively high household and business savings.
Chinese fire drill: forget tinkering with the renminbi's dollar peg. ... by Wolf, Charles, Jr. / The International Economy
However, households will save much more because of sharp declines in housing wealth, credit constraints and precautionary motives at a time of rising unemployment: the saving ratio will rise from 1.
The UK economy by National Institute Economic Review
 
 
 
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