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: https://doi.org/10.1016/j.econlet.2021.109939 
Cambridge-INET Working Paper 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)