Fiscal Consolidation and Automatic Stabilization: New Results

Dolls, Mathias; Fuest, Clemens; Peichl, Andreas und Wittneben, Christian (2022): Fiscal Consolidation and Automatic Stabilization: New Results. In: IMF Economic Review, Bd. 70, Nr. 3: S. 420-450

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.

• Dokumententyp: Zeitschriftenartikel
• Fakultät: Volkswirtschaft
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• ISSN: 2041-4161
• Sprache: Englisch