Automatic stabilizers of business cycle as mechanisms of stabilization policy of public finance in Poland

Abstract

The purpose of this article is to present the essence and describe the operation of automatic stabilizers, which – in addition to discretionary measures – are tools of the stabilizing function of public finance. Stabilization policy is closely related to the phenomenon of the business cycle. Its task is to mitigate the fluctuations in the course of the business cycle through the use of income and expenditure instruments affecting economic processes in the macroeconomic scale. Automatic business stabilizers are solutions implemented in the income and expenditure system that cause changes in the structure of cash flow between the public and private sectors – in favor of the private sector as the economic climate deteriorates, while improving the economic situation – in favor of the public finance sector.