Abstract
Fiscal support measures have different implications for public finances in the near term and beyond the COVID-19 pandemic. For this purpose, this paper examines the determinants of governments' fiscal support in response to the COVID-19 pandemic. The empirical analysis is based on the cross-sectional data estimations from 129 developed and developing countries. The estimation results indicate that a higher level of uncertainty related to COVID-19 (measured by the World Pandemic Uncertainty Indices) is positively related to fiscal support. Besides, countries with a higher total population and population over 65 years and older provide higher fiscal support. These results are valid when considering the developed countries separately. Policy implications for public finances during the COVID-19 pandemic are also discussed.
Highlights
Decreasing the spread ratio of the COVID-19 virus is the priority of policymakers since COVID-19 has a higher death ratio than the common flu
In this paper, we examine the determinants of governments’ fiscal support in response to the COVID-19 pandemic
We find that a higher level of uncertainty related to COVID-19 is positively related to fiscal support
Summary
Decreasing the spread ratio of the COVID-19 virus is the priority of policymakers since COVID-19 has a higher death ratio than the common flu. Where FISCALi is the fiscal support, Xi is the set of explanatory variables (per capita GDP, population, human development index, life expectancy, age 65 and older, and the World Pandemic Uncertainty Indices) in country i, and εi is the error term in the estimation. We use the per capita GDP [measured by the Purchasing Power Parity (PPP) $ prices], population (in millions), the human development index (index from 0 to 1), life expectancy (in years), and age 65 and older (% of total population) These data were obtained from Hasell et al [18] at the website (https://github.com/owid/covid19-data/tree/master/scripts/scripts/testing). Fiscal support (total) Per capita GDP (PPP $) Population (millions) Human development index Life expectancy Age 65 and older (ratio) World Pandemic Uncertainty Indices. There are positive correlations among the human development index, life expectancy, and 65 years and older population
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
