The paper analyzes the effects on consumption from changes in the riskiness of taxes. It starts by reinterpreting the … effects that a MPS and a BBPS has on consumption decisions. It is shown that the comparative statics results for a BBPS could …

We argue that the U.S. personal saving rate's long stability (1960s-1980s), subsequent steady decline (1980s-2007), and … recent substantial rise (2008-2011) can be interpreted using a parsimonious 'buffer stock' model of consumption in the … presence of labor income uncertainty and credit constraints. Saving in the model is affected by the gap between 'target' and …

We argue that the US personal saving rate's long stability (1960s-1980s), subsequent steady decline (1980s-2007), and … recent substantial rise (2008-2011) can be interpreted using a parsimonious buffer stock model of consumption in the presence … of labor income uncertainty and credit constraints. Saving in the model is affected by the gap between target and actual …