TY  - JOUR
AU  - Kimball,Miles S.
AU  - Mankiw,N. Gregory
TI  - Precautionary Saving and the Timing of Taxes
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 2680
PY  - 1989
Y2  - September 1989
UR  - http://www.nber.org/papers/w2680
L1  - http://www.nber.org/papers/w2680.pdf
N1  - Author contact info:
Miles S. Kimball
Department of Economics
University of Michigan
Ann Arbor, MI  48109-1220
Tel: 734/764-2375
Fax: 734/764-2769
E-Mail: mkimball@umich.edu

N. Gregory Mankiw
Department of Economics
Littauer 223
Harvard University
Cambridge, MA  02138
Tel: 617/495-4301
Fax: 617/495-7730
E-Mail: ngmankiw@fas.harvard.edu
AB  - This paper analyzes the effects of government debt and income taxes on consumption and saving in a world of infinitely-lived households having uncertain and heterogeneous incomes. The special structure of the model allows exact aggregation across households despite incomplete markets. The effects of government debt are shown to be substantial, roughly comparable to those resulting from finite horizons, and crucially dependent on the length of time until the debt is repaid. Also, anticipated changes in taxes are shown to cause anticipated changes in consumption. Finally, an index of fiscal stance is derived.
ER  -