Income Redisitribution and Income Stabilization through Fiscal Policy

The aim of the paper is to evaluate the redistributive and stabilizing functions of the Spanish budget through the automatic stabilizers, applying methodologies developed by the literature about the economic effects of the fiscal federations. An analysis at an autonomous region level for the period 1995-2002 has been carried out using panel data. The obtained results show the entity of the redistributive effect and the scarce economic relevance of the stabilizing function of the direct taxes, the social benefits and contributions and, in this way, they confirm the estimations obtained by preceding studies for previous periods. The incorporation of the in kind transferences reveals that these ones exert a considerable redistributive and stabilizing effect.