skip to content

Faculty of Economics

Journal Cover

Chudik, A., Mohaddes, K. and Raissi, M.

Covid-19 Fiscal Support and its Effectiveness

Economics Letters

Vol. 205 no. 109939 pp. 1-5 (2021)

Abstract: 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.

Keywords: TGVAR, Covid-19, Threshold effects, Fiscal policy

JEL Codes: C32, E44, E62, F44

Author links: Kamiar Mohaddes  

Publisher's Link:

Cambridge Working Paper in Economics Version of Paper: A Counterfactual Economic Analysis of Covid-19 Using a Threshold Augmented Multi-Country Model, Chudik, A., Mohaddes, K., Pesaran, M. H., Raissi, M. and Rebucci, A., (2020)

Papers and Publications

Recent Publications

Merrick Li, Z. and Linton, O. A ReMeDI for Microstructure Noise Econometrica [2022]

Elliott, M., Golub, B. and Leduc, M. V. Supply Network Formation and Fragility American Economic Review [2022]

Den Haan, W., Freund, L. B. and Rendahl, P. Volatile Hiring: Uncertainty in Search and Matching Models Journal of Monetary Economics, forthcoming [2021]

Mueller, H. and Rauh, C. The Hard Problem of Prediction for Conflict Prevention Journal of the European Economic Association, forthcoming [2022]