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I am very much a fan of the line of work that Chris Carroll and his collaborators have been exploring in recent years. Precautionary saving is different from and much more interesting than we used to think. It can account for a range of interesting phenomena that are hard to explain within the standard certainty-equivalence version of life-cycle or permanent-income theory. In particular, precautionary behavior changes the role of assets, so that it makes sense to look to precautionary motives for a coherent account of the Greenspan hypothesis that the debt buildup in the 1980s contributed to the recession of the early 1990s. I think that the study has a good deal to it, and I am sympathetic to the general thrust of the paper. I like the emphasis on durable goods as well as on nondurables and assets, and I like and find plausible the proposition that financial deregulation has increased the vulnerability of the economy by …