Fiscal Consolidation and Automatic Stabilization: New Results

We derive a novel measure of household income stabilization and analyze how reforms tax-benefit systems in the period 2007–2014 have affected workings automatic stabilizers EU-27. Our results reveal that heterogeneity across EU countries has become slightly smaller over under consideration. With few exceptions, could operate freely early phase financial economic crisis, but were constrained several by subsequent fiscal consolidation measures. A comparison our estimates inherent with macro measures such as changes cyclically adjusted budget balances reveals micro-based provide more precise information about degree stabilization.