The automatic stabilizer is an economic policy that automatically stabilizes economic fluctuations without changes in tax rate or government spending when there is an economic boom or an economic recession.
The result of this paper is that comparing automatic stabilizer executed in the Asian financial crisis and the Global financial crisis, the size of automatic stabilizer is measured bigger when there happens the crisis and after the crisis. That means automatic stabilizer reduces the amplitude of economic fluctuations normally without changes in economic policy.
• Stabilizing economic fluctuations (change of GDP gap (100 percent)) by the automatic stabilizer in Korea: The Asian financial crisis (18 percent) → The Global financial crisis (24 percent)
The size of automatic stabilizer in Korea is getting bigger as time goes by because the size of the government (for example, unemployment benefit, etc.) is grown bigger. Therefore, it is measured that the number of automatic stabilizer is higher in the Global financial crisis rather than in the Asian financial crisis.
The result of this paper is that comparing automatic stabilizer executed in the Asian financial crisis and the Global financial crisis, the size of automatic stabilizer is measured bigger when there happens the crisis and after the crisis. That means automatic stabilizer reduces the amplitude of economic fluctuations normally without changes in economic policy.
• Stabilizing economic fluctuations (change of GDP gap (100 percent)) by the automatic stabilizer in Korea: The Asian financial crisis (18 percent) → The Global financial crisis (24 percent)
The size of automatic stabilizer in Korea is getting bigger as time goes by because the size of the government (for example, unemployment benefit, etc.) is grown bigger. Therefore, it is measured that the number of automatic stabilizer is higher in the Global financial crisis rather than in the Asian financial crisis.
Park Seungjun, Lee Kangkoo