Covid-19 fiscal support and its effectiveness

Alexander Chudik, Kamiar Mohaddes and Mehdi Raissi

Economics Letters, 2021, vol. 205, issue C

Abstract: This paper uses a threshold-augmented Global VAR model to quantify the macroeconomic effects of countries’ discretionary fiscal actions in response to the Covid-19 pandemic and its fallout. Our results are threefold: (1) fiscal policy is playing a key role in mitigating the effects of the pandemic; (2) all else equal, countries that implemented larger fiscal support are expected to experience less output contractions; (3) emerging markets are also benefiting from the synchronized fiscal actions globally through the spillover channel and reduced financial market volatility.

Keywords: TGVAR; Covid-19; Threshold effects; Fiscal policy (search for similar items in EconPapers)
JEL-codes: C32 E44 E62 F44 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (18)

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Working Paper: Covid-19 Fiscal Support and its Effectiveness (2021)
Working Paper: Covid-19 fiscal support and its effectiveness (2021)
Working Paper: COVID-19 Fiscal Support and Its Effectiveness (2021)
Working Paper: COVID-19 Fiscal Support and Its Effectiveness (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:205:y:2021:i:c:s0165176521002160

DOI: 10.1016/j.econlet.2021.109939

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