Nor was there wanting still another
precautionary motive more related to Ahab personally.
''Yung fund is
precautionary motive para sure tayo just in case.
Considerable interest focuses on the third order, where the early results of Leland (1968) and Sandmo (1970), tying prudence, or equivalently downside risk aversion, to the
precautionary motive for saving, are now augmented by more recent studies showing that prudence implies precautionary self-protection in a temporal context (Wang and Li, 2015) and revealing the importance of prudence for predicting the effect of risk on the ranking of monitoring systems when randomized monitoring is practicable (Fagart and Sinclair-Desgagne, 2007), on patience in bargaining (White, 2008), on precautionary bidding in auctions (Kocher, Pahlke, and Trautmann, 2015), and on the private supply of public goods (Bramoulle and Treich, 2009; Eichner and Pethig, 2015), among many other applications.
He distinguishes between eight saving motives: the
precautionary motive, the life-cycle motive, intertemporal substitution, improvement, independence, bequest, and avarice.
Precautionary motive emphasizes that firms retain some reserve cash to avoid risk of failure in making payment for contingency expenses.
This paper argues that currency substitution refers to a country's residents for the transaction motive,
precautionary motive, portfolio motive (i.e.
The
precautionary motive requires highly liquid savings in developing economies, where insurance for precautionary purposes seems to be less developed (Carrin 2002).
"The key mechanism is
precautionary motive: more uncertainty induces residents to save more, and higher savings are in part channeled into foreign assets," they write.
Kaynes [5] suggests that there are three incentives for reserve cash holdings including transaction motive,
precautionary motive and speculative motive.
They conclude that the
precautionary motive is important in accounting for higher cash holdings.
Professor Brian Morgan, director of the Creative Leadership and Enterprise Centre at the School of Management at Uwic in Cardiff, blamed a "
precautionary motive" of people preferring to hold on to liquid assets - such as cash - than invest, for the sluggish growth.
