Automatic fiscal stabilizers

Automatic fiscal stabilizers,

Definition of Automatic fiscal stabilizers:

  1. Policies or institutions (built into an economic system) that automatically tend to dampen economic cycle fluctuations in income, employment, etc., without direct government intervention. For example, in boom times, progressive income tax automatically reduces money supply as incomes and spendings rise. Similarly, in recessionary times, payment of unemployment benefits injects more money in the system and stimulates demand. Also called automatic stabilizers or built-in stabilizers.

Meaning of Automatic fiscal stabilizers & Automatic fiscal stabilizers Definition