scholarly journals The moderating effect of social capital on fiscal policy responses to COVID-19: Cross-country evidence

2021 ◽  
pp. 7-7
Author(s):  
Mustafa Gömleksiz ◽  
Kıvanç Altıntaş
Keyword(s):  
Social Capital ◽  
Fiscal Policy ◽  
Risk Groups ◽  
Moderating Effect ◽  
Policy Outcomes ◽  
Health Profile ◽  
Policy Responses ◽  
Care Systems ◽  
Policy Measures ◽  
Preventative Interventions

This study suggests that an adequate level of social capital with a robust health profile might be associated with positive policy outcomes in combating COVID-19. We investigate the effect of interaction between fiscal policy responses and social capital on the spreading of the pandemic, by considering the country health profile, demographic and economic factors, in a cross-section of 94 countries. Firstly, the results of the analysis indicate the moderating effect of social capital on keeping the pandemic under control through fiscal policy measures. In particular, strong bilateral and family ties as well as better coordination and cooperation at the community level can facilitate the goal of fiscal policy measures. The results also reveal that the declining effect of fiscal policy on the pandemic mostly arises from the relatively high social capital levels, while it loses its effectiveness at low levels. Secondly, the findings emphasize the role of behavioural risk factors, care systems and preventative interventions as prominent determinants of surviving in pandemic. Thirdly, we conclude that taking specific measures for identified vulnerable and high-risk groups is quite important in overcoming the disease.

scholarly journals Pakistan: making a “COVID budget” in a struggling economy

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Marium Ashfaq ◽  
Mohsin Bashir
Keyword(s):  
Fiscal Policy ◽  
Government Expenditure ◽  
Fiscal Year ◽  
Religious Groups ◽  
Political Factors ◽  
Content Type ◽  
Policy Responses ◽  
Policy Measures ◽  
The Government ◽  
The Military

PurposeThe purpose of this study is to examine the fiscal measures undertaken by the Pakistani government to counter the recessionary pressures of the coronavirus pandemic. The authors analyse the economic, social and political factors that have shaped the government's fiscal policy response to this economic shock.Design/methodology/approachThe authors analyse the federal and provincial budget documents for the fiscal year 2020–21 to study the fiscal response of the government. The authors review recent research articles and news pieces to examine the determinants of these budgetary measures.FindingsThe government adopted expansionary fiscal policy measures such as reduced taxation and increased government expenditure to counter the recessionary pressures of the pandemic. These measures, however, were largely constrained by macroeconomic issues of high fiscal debt, slow economic growth and low fiscal space and political influences from the military and religious groups.Research limitations/implicationsThe coronavirus pandemic is an ongoing issue which may pose more threats and elicit more policy responses as it evolves. This research may be extended as the pandemic progresses, to include further policy responses.Originality/valueThis research provides insight into the unique problems faced by the Pakistani government during the pandemic, and how it steers the economy despite these limitations.

Discretion Rather Than Rules

2019 ◽  
pp. 90-109
Author(s):  
Charlotte Rommerskirchen
Keyword(s):  
Fiscal Policy ◽  
Free Riding ◽  
Fiscal Rules ◽  
Policy Outcomes ◽  
Stability And Growth Pact ◽  
The Great Recession ◽  
Policy Responses ◽  
Growth Pact ◽  
Hard Times ◽  
The Stability

Solutions to free riding, whether stability or growth free riding, are thought to be found in the provision of incentives. Yet the empirical findings of this chapter suggest that domestic fiscal rules, such as debt brakes, did not impact on the fiscal policy responses to the Great Recession. Similarly, EU-level agreements (the Stability and Growth Pact (SGP) and the newly created European Economic Recovery Plan (EERP)) did not impact on fiscal policy choices. First, the majority of domestic fiscal rules were equipped with exceptionality clauses. As a result, they did not impose stern constraints on fiscal policy in hard times. Second, the EERP and SGP were meaningless for fiscal policy outcomes; member states adopted stimulus programs as they saw fit with little concern for EU-level agreements or EU-wide aims for stability and growth.

scholarly journals The macroeconomic effects of COVID-19 in Montenegro: a Bayesian VARX approach

2020 ◽  
Vol 6 (1) ◽  
Author(s):  
Gordana Djurovic ◽  
Vasilije Djurovic ◽  
Martin M. Bojaj
Keyword(s):  
Human Capital ◽  
Capital Stock ◽  
Economic Freedom ◽  
Supply And Demand ◽  
Health Expenditures ◽  
Highly Qualified ◽  
Demand And Supply ◽  
Policy Responses ◽  
Out Of Sample ◽  
Policy Measures

Abstract This study examines, diagnoses, and assesses appropriate macroeconomic policy responses of the Montenegrin Government to the outbreak of COVID-19. The model econometrically measures the macroeconomic costs using a Bayesian VARX Litterman/Minessota prior to the pandemic disease in terms of demand and supply loss due to illness and closed activities and their effects on GDP growth in various pandemic scenarios. We explore five economic scenarios—shocks—using the available data from January 2006 to December 2019, following real out-of-sample forecasts generated from January 2020 to December 2020. Sensitivity scenarios spanning January 2020 to June 2020 from ± 10 to ± 60% were analyzed. We observed what happens to the supply and demand sides, namely, GDP, tourism, capital stock, human capital, health expenditures, economic freedom, and unemployment. The results show a toll on the GDP, tourism, unemployment, capital stock, and especially human capital for 2020. The recommended policy measures are public finance spending initiatives focused on securing employment and keeping highly qualified staff in Montenegrin companies. Considering all uncertainties, the rebound of the Montenegrin economy could take a few years to reach pre-COVID 19 output levels.

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