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Riccardo Tilli, Paolo D'Imperio and Cristiana Fiorelli
 
''Fiscal policy response to the COVID-19 pandemic in the euro area''
( 2023, Vol. 43 No.1 )
 
 
We estimate the macroeconomic impact of fiscal measures adopted in response to the COVID-19 crisis at the euro area level. Given the multitude of shocks occurred simultaneously during the pandemic, the fiscal stimulus is identified together with other supply- and demand-side shocks using a sign and zero restricted Bayesian vector autoregressive (VAR) model. Our results suggest that fiscal policy measures avoided a further collapse of GDP equal to 3.7 percentage points during the two years 2020-2021.
 
 
Keywords: Fiscal policy, VAR, Covid-19
JEL: E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General
 
Manuscript Received : Oct 31 2022 Manuscript Accepted : Mar 30 2023

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