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Countercyclical economic policy response during COVID-19

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  • Elgin, Ceyhun

Abstract

This paper introduces an extensive database of governments’ economic policy measures adopted in response to the COVID-19 pandemic and examines the outcomes of these measures. Using this novel dataset, five key observations are documented: (1) Countries expected by the IMF at the onset of the pandemic to experience sharper GDP declines in 2020 adopted larger fiscal and macro-financial packages by year-end. (2) Wealthier nations implemented larger fiscal and macro-financial policy packages, even as a percentage of GDP. (3) High pre-pandemic inflation countries adopted less expansionary monetary policies. (4) Adoption of larger fiscal packages correlated with higher GDP growth rates in 2020 and 2021. (5) Countries with more expansionary policies during the pandemic did not necessarily experience higher inflation rates in 2021 or 2022.

Suggested Citation

  • Elgin, Ceyhun, 2025. "Countercyclical economic policy response during COVID-19," Economic Systems, Elsevier, vol. 49(3).
    • Handle: RePEc:eee:ecosys:v:49:y:2025:i:3:s0939362524001109
    DOI: 10.1016/j.ecosys.2024.101288
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    Keywords

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    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • O - Economic Development, Innovation, Technological Change, and Growth

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