Fiscal policy response to the COVID-19 pandemic in the euro area

Riccardo Tilli (), Paolo D'Imperio and Cristiana Fiorelli ()
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Cristiana Fiorelli: Department of Economic and Legal Studies - University of Naples Parthenope

Economics Bulletin, 2023, vol. 43, issue 1, 366 - 372

Abstract: We estimate the macroeconomic impact of fiscal measures adopted in response to the COVID-19 crisis at the euro area level. Given the multitude of shocks occurred simultaneously during the pandemic, the fiscal stimulus is identified together with other supply- and demand-side shocks using a sign and zero restricted Bayesian vector autoregressive (VAR) model. Our results suggest that fiscal policy measures avoided a further collapse of GDP equal to 3.7 percentage points during the two years 2020-2021.

Keywords: Fiscal policy; VAR; Covid-19 (search for similar items in EconPapers)
JEL-codes: E3 E6 (search for similar items in EconPapers)
Date: 2023-03-30
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