Likewise, many observers advocate bolstering "
automatic stabilizers" such as unemployment benefits.
"This way,
automatic stabilizers and fiscal stimulus can be deployed again, should downside risks materialize.
Units include a battery discharge indicator, integral charger, overload relief valve, and
automatic stabilizers that lock into place when the load is approximately 15 inches high.
The few studies attempting to identify the determinants of fiscal stimulus relied entirely on economic indicators such as the output gap,
automatic stabilizers or the fiscal space (Ahrens 2009; Horton and Ivanova 2009, Prasad and Sorkin 2009).
Section III provides a framework for calculating the contribution of
automatic stabilizers to the deficit.
China's lack of
automatic stabilizers places the tension between reform objectives and growth imperatives in sharp relief.
During a recession, government spending faces competing forces, as lower levels of economic activity result in lower revenues and, simultaneously,
automatic stabilizers such as unemployment benefits begin to increase as the labor situation deteriorates.
If the surplus target had been expressed as a target for net lending in particular years, it would have been necessary to tighten fiscal policy when the economy entered a recession and to give fiscal policy an expansionary stance in a booming economy in order to counteract the
automatic stabilizers. (35)
* Alisdair McKay, Boston University, and Ricardo Reis, Columbia University and NBER, "The Role of
Automatic Stabilizers in the U.S.
The government might have supplemented these "
automatic stabilizers" with new spending or by lowering tax rates, further increasing the fiscal deficit.