word
Automatic Stabilizer
aw-toh-MAT-ik STAY-bih-ly-zer
/ˌɔːtəˈmætɪk ˈsteɪbɪlaɪzər/Listen
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Syllable breakdown
automaticstabilizer
Dictionary meaning
A fiscal mechanism — such as unemployment insurance, progressive taxes, or welfare benefits — that automatically increases government spending or reduces tax revenue during economic downturns, thereby cushioning the economy without requiring new legislation
Examples
- Unemployment insurance acts as an automatic stabilizer because benefits rise automatically when job losses increase.
- Countries with strong automatic stabilizers tend to experience shallower recessions than those that rely solely on discretionary fiscal policy.
Synonyms: built-in stabilizer, automatic fiscal policy, countercyclical mechanism
Pronunciation tips
Eight syllables; stress the third and fifth: -MAT- and STA-
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