What is the term for programs and policies that help to decrease fluctuations in GDP?

The term that refers to programs and policies designed to help decrease fluctuations in GDP is known as automatic stabilizers. These are mechanisms built into the economy that automatically adjust fiscal policies without the need for explicit government intervention. For instance, during periods of economic downturn, automatic stabilizers such as unemployment benefits and progressive income taxes help to cushion the decline in consumer spending by providing financial assistance to those who have lost their jobs. This can help stabilize demand in the economy, thereby mitigating the effects of fluctuations in GDP.

Unlike discretionary fiscal policies, which require active government intervention to adjust taxation and spending levels, automatic stabilizers operate automatically and are implemented without additional legislative action. This makes them particularly effective in responding quickly to changes in economic conditions.

In the context of fiscal policies, while they include both automatic stabilizers and discretionary measures (which can be enacted in response to economic conditions), the question specifically looks for a term that reflects the inherent stabilizing mechanisms within the economy. Demand-side policies generally refer to strategies aimed at stimulating economic demand but do not specifically indicate the automatic nature of the adjustments. Market corrections involve adjustments that occur through the natural functioning of supply and demand but do not directly relate to government policies aimed at stabilizing GDP.