The Effects of Fiscal Measures During COVID-19

Pragyan Deb, Davide Furceri, Jonathan Ostry, Nour Tawk and Naihan Yang

No 2021/262, IMF Working Papers from International Monetary Fund

Abstract: This paper empirically examines the effects of fiscal policy measures during the COVID-19 pandemic, using a novel database of daily fiscal policy announcements—classified by type of fiscal measure—and high-frequency economic indicators for 52 countries from January 1 to December 31, 2020. The results suggest that fiscal policy announcements have been effective in stimulating economic activity, boosting confidence, and reducing unemployment, but their effect varies by type of measure and country characteristics. Emergency lifeline measures (which form the bulk of below-the-line measures) are more effective when containment policies are stringent, providing cashflow support to firms and households. Demand-support measures (which comprise most of above-the-line measures) are more effective when containment measures are relaxed.

Keywords: Fiscal policy; COVID-19; multipliers; high-frequency data.; fiscal policy announcement; containment policy; demand-support measure; emergency lifeline; industrial production; Industrial production; Unemployment rate; Fiscal stimulus; Global (search for similar items in EconPapers)
Pages: 65
Date: 2021-11-05
New Economics Papers: this item is included in nep-mac
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Working Paper: The Effects of Fiscal Measures During COVID-19 (2021)
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