TY  - JOUR
AU  - Mankiw,N. Gregory
TI  - The Savers-Spenders Theory of Fiscal Policy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7571
PY  - 2000
Y2  - February 2000
UR  - http://www.nber.org/papers/w7571
L1  - http://www.nber.org/papers/w7571.pdf
N1  - Author contact info:
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  - The macroeconomic analysis of fiscal policy is usually based on one of two canonical models--the Barro-Ramsey model of infinitely-lived families or the Diamond-Samuelson model of overlapping generations.  This paper argues that neither model is satisfactory and suggests an alternative.  In the proposed model, some consumers plan ahead for themselves and their descendants, while others live paycheck to paycheck.  This model is easier to reconcile with the essential facts about consumer behavior and wealth accumulation, and it yields some new and surprising conclusions about fiscal policy.
ER  -