DEMO — development content for layout testing. Not real editorial reporting.
DEMO content for development and layout testing — not real editorial reporting.
Automatic stabilisers — such as tax receipts that fall and unemployment benefits that rise in downturns — cushion demand without new decisions.
How it works
Discretionary policy involves deliberate changes to spending or taxes, which can be powerful but slow to legislate and implement.
Government taxes and spending respond to the economy automatically, and can also be adjusted on purpose.
What to watch
The room for manoeuvre depends on public debt, borrowing costs and the credibility of medium-term fiscal plans.
Key concepts
- Fiscal policy
- Public finance
