[...]This paper presents theoretical and empirical analysis ofautomatic fiscal stabilizers. Using the modern theory of consumption behavior, we identify several channels throughwhich optimal reaction of household consumption plans toaggregate income shocks is tempered by these stabilizers....

For the past twenty years, Asia has been regarded as aneconomic success story. The recent economic turmoil in theregion, however, has prompted a reevaluation of the longtermsustainability of the dynamic economic performance.Undoubtedly, lessons will be drawn from the Asian experience—lessons...