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The Role Of The Automatic Stabilizers In Modern Economy

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  • Stevan Luković

    (University of Kragujevac, Faculty of Economics)

Abstract

Automatic stabilizers as a factor of cyclical fluctuations stabilization attract economists' attention for several decades. This paper deals with the mechanisms through which automatic stabilizers influence economy and positive and negative effects on aggregate demand they can produce. It is common when discussing automatic stabilizers to put the accent on certain tax categories, such as personal income tax and corporate income tax, оr some public expenditures, such as unemployment benefits and social protection. Given that, here only fiscal stabilizers will be discussed, although some nonfiscal categories also demonstrate stabilizing impact.

Suggested Citation

  • Stevan Luković, 2014. "The Role Of The Automatic Stabilizers In Modern Economy," Ekonomika, Journal for Economic Theory and Practice and Social Issues 2014-01, „Ekonomika“ Society of Economists, Niš (Serbia).
  • Handle: RePEc:esb:casprv:2014-117
    as

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    References listed on IDEAS

    as
    1. Dolls, Mathias & Fuest, Clemens & Peichl, Andreas, 2012. "Automatic stabilizers and economic crisis: US vs. Europe," Journal of Public Economics, Elsevier, vol. 96(3), pages 279-294.
    2. Glenn Follette & Byron Lutz, 2010. "Fiscal Policy in the United States: Automatic Stabilizers, Discretionary Fiscal Policy Actions, and the Economy," Revista de Economía y Estadística, Universidad Nacional de Córdoba, Facultad de Ciencias Económicas, Instituto de Economía y Finanzas, vol. 0(1), pages 41-73, January.
    3. Thomas J. Kniesner & James P. Ziliak, 2002. "Tax Reform and Automatic Stabilization," American Economic Review, American Economic Association, vol. 92(3), pages 590-612, June.
    4. Xavier Debrun & Radhicka Kapoor, 2010. "Fiscal Policy and Macroeconomic Stability; Automatic Stabilizers Work, Always and Everywhere," IMF Working Papers 10/111, International Monetary Fund.
    5. Thiess Buettner & Clemens Fuest, 2010. "The role of the corporate income tax as an automatic stabilizer," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 17(6), pages 686-698, December.
    6. Andres, Javier & Domenech, Rafael, 2006. "Automatic stabilizers, fiscal rules and macroeconomic stability," European Economic Review, Elsevier, vol. 50(6), pages 1487-1506, August.
    7. Alisdair McKay & Ricardo Reis, 2016. "The Role of Automatic Stabilizers in the U.S. Business Cycle," Econometrica, Econometric Society, vol. 84, pages 141-194, January.
    8. Alan J. Auerbach & Daniel R. Feenberg, 2000. "The Significance of Federal Taxes as Automatic Stabilizers," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 37-56, Summer.
    9. Devereux, Michael P. & Fuest, Clemens, 2009. "Is the Corporation Tax an Effective Automatic Stabilizer?," National Tax Journal, National Tax Association;National Tax Journal, vol. 62(3), pages 429-437, September.
    10. Mathias Dolls & Clemens Fuest & Andreas Peichl, 2011. "Automatic Stabilizers, Economic Crisis and Income Distribution in Europe," Research in Labor Economics,in: Who Loses in the Downturn? Economic Crisis, Employment and Income Distribution, volume 32, pages 227-255 Emerald Publishing Ltd.
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    More about this item

    Keywords

    Personal income tax; Corporate income tax; Unemployment benefits; Social Protection; Income redistribution;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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