The Extent and Composition of Automatic Stabilization in EU Countries
IMF Working Papers, May 12, 2023
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- The Extent and Composition of Automatic Stabilization in EU Countries
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Bibliographic details
- Authors: David Coady, Silvia De Poli, Adrián Hernández, Andrea Papini, Alberto Tumino
- Published: May 12, 2023
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400243394.001
Summary
- Analysis period: 2011 to 2019.
- Main objectives: quantify automatic income and demand stabilization in EU Member States and examine composition across income groups.
- Core results at the EU level in 2019:
- Automatic income stabilization averaged 41.3 percent.
- Demand stabilization averaged 84.7 percent.
Key findings on income stabilization
- Automatic income stabilization in 2019 averaged 41.3 percent at the EU level.
- Considerable variation exists among Member States in the extent of automatic income stabilization.
- Within countries, the overall extent of stabilization is similar across household income groups, but the composition differs:
- Income taxation is more important for high-income households.
- Transfers are more important for low-income households.
- Income stabilization proved stable over time, with a few exceptions driven by major reforms.
Key findings on demand stabilization
- EU-level demand stabilization in 2019 averaged 84.7 percent.
- Demand stabilization increases with household income, reflecting the greater ability of richer households to smooth consumption.
Subject coverage and keywords (as presented)
- Subject: Consumption, Disposable income, Income, Income distribution, Income shocks, National accounts
- Keywords: Consumption, Demand stabilization, Disposable income, EU SILC, Euromod, Europe, Global, Income, Income distribution, Income shocks, Income stabilization, market income, stabilization coefficient
Source: "The Extent and Composition of Automatic Stabilization in EU Countries", IMF Working Paper No. 2023/103 by David Coady, Silvia De Poli, Adrián Hernández, Andrea Papini, and Alberto Tumino (May 12, 2023).
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