{
  "title": "Fiscal Policy and Macroeconomic Stability: Automatic Stabilizers Work, Always and Everywhere",
  "publication": "IMF Working Papers, May 1, 2010",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/fiscal-policy-and-macroeconomic-stability-automatic-stabilizers-work-always-and-everywhere-23818",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/31/fiscal-policy-and-macroeconomic-stability-automatic-stabilizers-work-always-and-everywhere-23818",
  "overlayPath": "/en/publications/wp/issues/2016/12/31/fiscal-policy-and-macroeconomic-stability-automatic-stabilizers-work-always-and-everywhere-23818/index.md",
  "summary": "The paper revisits the link between fiscal policy and macroeconomic stability. Two salient features of our analysis are (1) a systematic test for the government’s ambivalent role as a shock absorber and a shock inducer—removing a downward bias present in existing estimates of the impact of automatic",
  "sections": [
    {
      "heading": "Summary and central findings",
      "content": "- The paper revisits the link between fiscal policy and macroeconomic stability.\n- Two salient features of the analysis:\n  - (1) A systematic test for the government’s ambivalent role as a shock absorber and a shock inducer—removing a downward bias present in existing estimates of the impact of automatic stabilizers.\n  - (2) A broad sample of advanced and emerging market economies.\n- Main results:\n  - Results provide strong support for the view that fiscal stabilization operates mainly through automatic stabilizers.\n  - The destabilizing impact of policy changes not systematically related to the business cycle may not be as robust as suggested in the literature."
    },
    {
      "heading": "Methodology highlights",
      "content": "- The study implements a systematic test that addresses a downward bias in existing estimates of automatic stabilizers’ impact.\n- The empirical sample spans both advanced and emerging market economies (broad sample)."
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- Automatic stabilizers are the primary channel through which fiscal policy contributes to macroeconomic stabilization.\n- Discretionary policy changes that are not systematically related to the business cycle may have less robust destabilizing effects than previously suggested in the literature.\n\n---\n\n Content in this bundle\n\n- Wp10111\n  - Wp10111 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp10111 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/fiscal-policy-and-macroeconomic-stability-automatic-stabilizers-work-always-and-everywhere-23818"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/31/fiscal-policy-and-macroeconomic-stability-automatic-stabilizers-work-always-and-everywhere-23818/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/31/fiscal-policy-and-macroeconomic-stability-automatic-stabilizers-work-always-and-everywhere-23818/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/31/fiscal-policy-and-macroeconomic-stability-automatic-stabilizers-work-always-and-everywhere-23818/bundle-manifest.json)",
    "Authors: Xavier Debrun, Radhicka Kapoor",
    "Published: May 1, 2010",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781455200702.001",
    "The paper revisits the link between fiscal policy and macroeconomic stability.",
    "Two salient features of the analysis:",
    "Main results:",
    "The study implements a systematic test that addresses a downward bias in existing estimates of automatic stabilizers’ impact.",
    "The empirical sample spans both advanced and emerging market economies (broad sample).",
    "Automatic stabilizers are the primary channel through which fiscal policy contributes to macroeconomic stabilization.",
    "Discretionary policy changes that are not systematically related to the business cycle may have less robust destabilizing effects than previously suggested in the literature.",
    "**Wp10111**"
  ],
  "related": [
    {
      "title": "Wp10111",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp10111.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp10111.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2010/_wp10111.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/31/fiscal-policy-and-macroeconomic-stability-automatic-stabilizers-work-always-and-everywhere-23818/index.md",
    "json": "/en/publications/wp/issues/2016/12/31/fiscal-policy-and-macroeconomic-stability-automatic-stabilizers-work-always-and-everywhere-23818/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/31/fiscal-policy-and-macroeconomic-stability-automatic-stabilizers-work-always-and-everywhere-23818/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T14:16:53.775Z"
}