IDEAS home Printed from https://ideas.repec.org/a/cii/cepiie/2022-q3-172-14.html
   My bibliography  Save this article

This time is different: Fiscal response to the COVID-19 pandemic among EU countries

Author

Listed:
  • Bettina Bökemeier
  • Marcin Wolski

Abstract

This paper empirically analyzes 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 periods. Based on panel estimations, we find that the fiscal reaction has been different this time, both concerning the policy direction as well as its magnitude. We argue that fiscal policy has turned from formally pro-cyclical design prior to COVID-19 period to counter-cyclical in the pandemic years, on average. While this is naturally driven by the wide roll-out of fiscal support measures during the pandemic, including health care expenditures and spending on job security, the change in the fiscal reaction function is still visible if these effects are taken away from the budget, even though the move is less pronounced and signifies a change from a pro-cyclical to an a-cyclical fiscal regime.

Suggested Citation

  • Bettina Bökemeier & Marcin Wolski, 2022. "This time is different: Fiscal response to the COVID-19 pandemic among EU countries," International Economics, CEPII research center, issue 172, pages 217-226.
    • Handle: RePEc:cii:cepiie:2022-q3-172-14
    as

    Download full text from publisher

    File URL: https://www.sciencedirect.com/science/article/pii/S2110701722000774
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Konstantin Kolev & Maya Tsoklinova, 2023. "Economic Interventionism Under Pandemic Conditions: Similarities And Differences On EU Level," Economic Archive, D. A. Tsenov Academy of Economics, Svishtov, Bulgaria, issue 1 Year 20, pages 55-74.
    2. Heimberger, Philipp, 2023. "This time truly is different: The cyclical behaviour of fiscal policy during the Covid-19 crisis," Journal of Macroeconomics, Elsevier, vol. 76(C).

    More about this item

    Keywords

    COVID-19 pandemic; Discretionary fiscal policy; New Member States; Counter-cyclical policies; Fiscal rules;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cii:cepiie:2022-q3-172-14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/cepiifr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.