{
  "title": "Automatic Fiscal Stabilizers",
  "publication": "IMF Staff Position Notes, September 28, 2009",
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  "summary": "This paper discusses how to enhance automatic stabilizers without increasing the size of government. We distinguish between permanent changes in the parameters of the tax and expenditure system (e.g.",
  "sections": [
    {
      "heading": "Executive summary",
      "content": "- Discusses how to enhance automatic stabilizers without increasing the size of government.\n- Distinguishes between:\n  - Permanent changes in the parameters of the tax and expenditure system (for example, changes in tax progressivity) that enhance the traditional automatic stabilizer.\n  - Temporary changes triggered by certain economic developments (for example, tax measures targeted at credit and liquidity constrained households, triggered during a severe downturn).\n- Argues that, with some exceptions, temporary, triggered measures are preferable because they can be implemented with lower disruptions to other fiscal policy goals (for example, economic efficiency).\n- Warns that countries should avoid introducing procyclicality as a result of fiscal rules, since such procyclicality would offset the effect of existing automatic stabilizers."
    },
    {
      "heading": "Key findings and analysis",
      "content": "- Permanent parameter changes (e.g., greater tax progressivity) can strengthen the traditional automatic stabilizer but may have trade-offs with other fiscal objectives, including economic efficiency.\n- Temporary, event-triggered measures (e.g., targeted tax measures for credit- and liquidity-constrained households during severe downturns) can enhance stabilization while limiting long-term distortions.\n- Fiscal rules that induce procyclicality undermine the effectiveness of automatic stabilizers by offsetting their stabilizing impact."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Prioritize temporary, triggered fiscal measures to enhance stabilization without expanding the permanent size of government.\n- Use targeted tax measures for households that are credit- and liquidity-constrained during severe downturns to maximize macroeconomic stabilization while preserving efficiency.\n- Design fiscal rules to avoid procyclical incentives that would counteract automatic stabilizers.\n- Consider exceptions where permanent parameter changes are justified, but weigh these carefully against potential efficiency costs.\n\nSource: IMF Staff Position Note \"Automatic Fiscal Stabilizers\" by Steven A. Symansky and Thomas Baunsgaard.\n\n---\n\n Content in this bundle\n\n- spn0923 - Executive Summary\n  - spn0923 - Executive Summary (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - spn0923 - Executive Summary (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/imf-staff-position-notes/issues/2016/12/31/automatic-fiscal-stabilizers-23303"
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    "Authors: Steven A. Symansky, Thomas Baunsgaard",
    "Published: September 28, 2009",
    "Series: IMF Staff Position Notes",
    "DOI: https://doi.org/10.5089/9781455290567.004",
    "Discusses how to enhance automatic stabilizers without increasing the size of government.",
    "Distinguishes between:",
    "Argues that, with some exceptions, temporary, triggered measures are preferable because they can be implemented with lower disruptions to other fiscal policy goals (for example, economic efficiency).",
    "Warns that countries should avoid introducing procyclicality as a result of fiscal rules, since such procyclicality would offset the effect of existing automatic stabilizers.",
    "Permanent parameter changes (e.g., greater tax progressivity) can strengthen the traditional automatic stabilizer but may have trade-offs with other fiscal objectives, including economic efficiency.",
    "Temporary, event-triggered measures (e.g., targeted tax measures for credit- and liquidity-constrained households during severe downturns) can enhance stabilization while limiting long-term distortions.",
    "Fiscal rules that induce procyclicality undermine the effectiveness of automatic stabilizers by offsetting their stabilizing impact.",
    "Prioritize temporary, triggered fiscal measures to enhance stabilization without expanding the permanent size of government.",
    "Use targeted tax measures for households that are credit- and liquidity-constrained during severe downturns to maximize macroeconomic stabilization while preserving efficiency.",
    "Design fiscal rules to avoid procyclical incentives that would counteract automatic stabilizers.",
    "Consider exceptions where permanent parameter changes are justified, but weigh these carefully against potential efficiency costs.",
    "**_spn0923 - Executive Summary**"
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