In the baseline economy, there are uninsurable idiosyncratic risks associated with uncertain lifetime and earnings shocks.
One possible reason for idiosyncratic risk to be uninsurable is that the shocks to an individual's productivity are not publicly observable.
At each period, households face uninsurable idiosyncratic uncertainty about the length of their lifetime.
They study a model in which there are uninsurable, persistent, and heteroskedastic labor income shocks.
The uninsurable income shocks generate a precautionary demand for financial assets, resulting in a positive target savings level.
The economy is an overlapping generations model characterized by uninsurable uncertainty about the length of lifetime.
Infinitely lived households face uninsurable labor income shocks.
In other words, we deal with uninsurable income risks.
