# Automatic Stabilizers

*Macro & Economy — Finicade finance glossary*

Automatic stabilizers are parts of the budget that cushion the cycle with no new legislation: benefits rise and tax receipts fall in a downturn.

Automatic stabilizers are parts of the budget that cushion the cycle without anyone legislating: unemployment benefits rise and tax receipts fall in a downturn, then reverse in a boom. Their advantage over discretionary stimulus is timing — they act immediately, while a spending bill takes months to pass and years to spend. Countries with larger welfare systems therefore experience milder output swings almost mechanically.

**Also known as:** automatic stabilisers, built-in stabilizers

**Related terms:** [Fiscal Policy](https://finicade.com/glossary/fiscal-policy), [Fiscal Multiplier](https://finicade.com/glossary/fiscal-multiplier), [Unemployment Rate](https://finicade.com/glossary/unemployment-rate), [Budget Deficit](https://finicade.com/glossary/budget-deficit), [Recession](https://finicade.com/glossary/recession)

Source: https://finicade.com/glossary/automatic-stabilizers