³²The figure reflects results for the calibration detailed in Table 1, which are representative of the micro literature which has mainly focused on matching behavior of median or “typical” households, who hold little liquid wealth. A higher time preference factor would be necessary to match the behavior of richer households who hold much of the aggregate capital stock. However, for these richer households, the precautionary motives highlighted in this model may be less relevant than other motives which are less well understood.