COVID-19 Fiscal Support and Its Effectiveness

Alexander Chudik, Kamiar Mohaddes and Mehdi Raissi

No 408, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

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)
Pages: 12
Date: 2021-04-06
New Economics Papers: this item is included in nep-cwa and nep-mac
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Citations: View citations in EconPapers (17)

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Related works:
Journal Article: 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:fip:feddgw:90680

DOI: 10.24149/gwp408

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