The Extent and Composition of Automatic Stabilization in EU Countries

David Coady, Silvia De Poli, Adrián Hernández, Andrea Papini and Alberto Tumino

No 2023/103, IMF Working Papers from International Monetary Fund

Abstract: This paper analyses the magnitude of automatic income and demand stabilization in EU Member States between 2011 to 2019. Our analysis finds that automatic income stabilization in 2019 averaged 41.3 percent at the EU level, with considerable variation among Member States. While the extent of stabilization is similar across income groups within countries, the source of stabilization differs, with income taxation (transfers) being more important for high-income (low-income) households. Income stabilization proved stable over time, with a few exceptions driven by major reforms. EU-level demand stabilization averaged 84.7 percent, increasing with household income and reflecting the greater ability of richer households to smooth consumption.

Keywords: Income stabilization; Demand stabilization; Euromod; EU SILC; stabilization coefficient; market income; Income; Income shocks; Disposable income; Consumption; Income distribution; Europe; Global (search for similar items in EconPapers)
Pages: 31
Date: 2023-05-12
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=533326 (application/pdf)

Related works:
Working Paper: The Extent and Composition of Automatic Stabilization in EU Countries (2023)
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:imf:imfwpa:2023/103

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().