Analyze This! Automatic Stabilizers

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This content is about the potential benefits of using a rules-based approach to fiscal stimulus during economic crises such as the Covid-19 pandemic. This approach involves setting up rules in advance that trigger the delivery of direct cash transfers, targeted to people most in need, as well as shovel-ready productive infrastructure projects. This approach can reduce the chance of recession, provide support quickly, and reduce uncertainty by allowing people and companies to plan ahead. It is discussed in more detail in the IMF's World Economic Outlook.