Fiscal Consolidation and Automatic Stabilization: New Results

Mathias Dolls, Clemens Fuest, Andreas Peichl and Christian Wittneben

IMF Economic Review, 2022, vol. 70, issue 3, No 2, 420-450

Abstract: Abstract We derive a novel measure of household income stabilization and analyze how reforms of tax-benefit systems in the period 2007–2014 have affected the workings of automatic stabilizers in the EU-27. Our results reveal that the heterogeneity in automatic stabilizers across EU countries has become slightly smaller over the period under consideration. With a few exceptions, automatic stabilizers could operate freely in the early phase of the financial and economic crisis, but were constrained in several EU countries by subsequent fiscal consolidation measures. A comparison of our estimates of automatic stabilizers inherent in tax-benefit systems with macro measures such as changes in cyclically adjusted budget balances reveals that micro-based estimates provide more precise information about the degree of household income stabilization.

Keywords: Automatic stabilizers; Fiscal consolidation; Euro-area debt crisis (search for similar items in EconPapers)
JEL-codes: E62 E63 H12 H31 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://link.springer.com/10.1057/s41308-022-00162-y Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Fiscal Consolidation and Automatic Stabilization: New Results (2020)
Working Paper: Fiscal Consolidation and Automatic Stabilization: New Results (2020)
Working Paper: Fiscal Consolidation and Automatic Stabilization: New Results (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:imfecr:v:70:y:2022:i:3:d:10.1057_s41308-022-00162-y

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2

DOI: 10.1057/s41308-022-00162-y

Access Statistics for this article

More articles in IMF Economic Review from Palgrave Macmillan, International Monetary Fund
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().