The effectiveness of the post-Covid-19 recovery policies: Evidence from a simulated DSGE model for Turkey

Ufuk Can, Zeynep Gizem Can, Mehmet Emin Bocuoglu and Muhammed Erkam Dogru

Economic Analysis and Policy, 2021, vol. 71, issue C, 694-708

Abstract: This paper aims to explore the effectiveness of macroeconomic recovery policies implemented by fiscal and monetary authorities against Covid-19 pandemic in Turkey. A dynamic stochastic general equilibrium (DSGE) model, in which Turkey is defined as an open and small developing country, is built. The model contains eight groups of agents, which are two heterogeneous households, the firms producing intermediate, final and capital goods, the commercial bank, the central bank and the government. Stochastic simulations of the model reveal the propagation of Covid-19 shock, the impacts of fiscal and monetary tools on the selected economic variables. The simulations demonstrate that direct fiscal measures are more effective in mitigating negative economic impacts of Covid-19. This paper broadens existing literature on the macroeconomic impacts of Covid-19 by exerting the functioning of different fiscal and monetary measures in a comprehensive framework within a developing country context.

Keywords: Covid-19; DSGE; Macroeconomic recovery; Turkey (search for similar items in EconPapers)
JEL-codes: C63 D58 E63 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:71:y:2021:i:c:p:694-708

DOI: 10.1016/j.eap.2021.07.006

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