This Time is Different: Fiscal Response to the Covid-19 Pandemic among EU Countries

15 Pages Posted: 16 Feb 2022

See all articles by Bettina Bökemeier

Bettina Bökemeier

Bielefeld University - Department of Business Administration and Economics

Marcin Wolski

European Investment Bank

Date Written: January 1, 2022

Abstract

This paper empirically analyses fiscal policy behavior in the European Union (EU) Member States and assesses how it has changed during the recent pandemic crisis compared to previous crisis situations. Based on panel estimations the outcomes reveal that this time is different, both concerning the policy direction as well as its magnitude. We confirm that fiscal policy has turned from formally pro-cyclical/a-cyclical design prior to COVID-19 period to counter-cyclical in the pandemic years. Moreover, this changeover is independent from the status of the EU Membership, as it affects both Old Member States (OMS) and New Member States (NMS) likewise.

Keywords: COVID-19 pandemic, Discretionary Fiscal Policy, New Member States, Counter-Cyclical Policies, Fiscal Rules

JEL Classification: E62, O52

Suggested Citation

Bökemeier, Bettina and Wolski, Marcin, This Time is Different: Fiscal Response to the Covid-19 Pandemic among EU Countries (January 1, 2022). Bielefeld Working Papers in Economics and Management No. 01-2022, Available at SSRN: https://ssrn.com/abstract=4032390 or http://dx.doi.org/10.2139/ssrn.4032390

Bettina Bökemeier (Contact Author)

Bielefeld University - Department of Business Administration and Economics ( email )

P.O. Box 100131
D-33501 Bielefeld, NRW 33501
Germany

Marcin Wolski

European Investment Bank ( email )

Luxembourg City, 2968
Luxembourg
691286623 (Phone)

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