COVID-19 Fiscal Support and its Effectiveness
12 Pages Posted: 14 May 2021
Date Written: April, 2021
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.
JEL Classification: C32, E44, E62, F44
Suggested Citation: Suggested Citation