Stimulus Package Research Articles

Low-carbon energy systems: seizing market-based business opportunities across borders

Asia has been experiencing much faster economic growth than the world average and has been consuming more energy and natural resources than our planet’s regenerative capacity can provide. With each passing day, Asia’s carbon emissions have been growing, as does its vulnerability to climate risks. The poor are the most vulnerable to these disruptions, lacking options to adapt to changing climatic conditions. The transition to a low-carbon green growth in almost all of emerging economies in the Asian region is underway. This transition has become unstoppable and irreversible. In this context, it is important to realize that the Coronavirus (COVID-19) pandemic has its own impact on the economies. Nevertheless, it has also created new once-in-a-generation opportunities for implementing hard policy reforms through economic recovery and stimulus packages. The need to accelerate the low-carbon transition as part of the pandemic recovery is unquestionable, but the question is how to do it in a cost-effective way. This research presents a broad diagnosis of new regional cooperation opportunities in areas essential to complete the transition to a low-carbon economy by 2030 and a net zero economy by 2050–2060. It highlights where regional cooperation and coordination can have the greatest impact. It points to a number of policy areas—trade, carbon taxation, carbon pricing, and innovation—where regional cooperation reduces the cost of implementing national actions and complements global pacts. This model also creates business opportunities for developing competitive green industries and low-carbon technologies across countries in the region.

Covid-19 severity, government responses and stock market reactions: a study of 14 highly affected countries

PurposeThis study undertakes a comprehensive investigation into the far-reaching repercussions of Covid-19 stimulus packages and containment policies on stock returns, meticulously examining a diverse array of 14 distinct markets.Design/methodology/approachThis study employed the Panel SVAR model to analyze the relationships between various policies and stock market performance during the Covid-19 outbreak. The sample comprises 5432 daily observations spanning from December 2020 to January 2022 for the 14 selected markets, with missing data excluded.FindingsThe findings reveal three consistent impacts across all 14 markets. Firstly, stock returns immediately reversed and decreased within a day when Governments tightened containment policies. Secondly, economic stimulus packages led to a fall in stock returns. Thirdly, an increasing death rate caused the stock return to decrease in the following two days. These findings are supported by the uniform impulse responses in all three shocks, including common, composite and idiosyncratic shocks. Furthermore, all inverse root tests satisfy the stability conditions, indicating the stability and reliability of Panel SVAR estimations.Practical implicationsOne vital implication is that all government decisions and measures taken against the shock of Covid-19 must consider economic impacts to avoid unnecessary financial losses and support the effective functioning of stock markets during similar shocks. Secondly, investors should view the decline in stock returns due to Covid-19 effects as temporary, resulting from anxiety about the outbreak. The study highlights the importance of monitoring the impact of policies on financial markets and the broader economy during crises. Overall, these insights can prove helpful for investment decisions and policymaking during future crises.Originality/valueThis study constitutes a noteworthy addition to the literature on behavioural finance and the efficient market hypothesis, offering a meticulous analysis of the multifaceted repercussions of Covid-19 on market interactions. In particular, it unveils the magnitude, duration and intricate patterns of market volatilities linked to significant shock events, encompassing a comprehensive dataset spanning 14 distinct markets.

Total factor productivity and state ownership: Evidence from China's 2008 stimulus package

AbstractWe examine the impact of China's economic stimulus plan in 2008 on the total factor productivity (TFP) of China's listed firms. We hypothesize that firms operating in regions characterized by greater resource misallocation would experience a more pronounced decline in TFP following the implementation of the stimulus plan. To gauge the extent of resource misallocation, we employ the proportion of state‐owned enterprises (SOEs) as a measure. Our findings reveal a substantial decrease in TFP for firms located in provinces with higher SOE shares compared to those in provinces with lower SOE shares, amounting to approximately 9.2%. These results highlight the unintended policy consequence of the stimulus plan for firm‐level productivity in China.

ANALYSIS OF THE EFFECTIVENESS OF GOVERNMENT STIMULUS PACKAGES IN INDIA WITH SPECIAL REFERENCE TO THE PUBLIC SECTOR BANKS AND GOVERNMENT ORGANISATIONS LIKE MTNL ETC.

Indian banks were mostly immune to the first repercussions of the global financial crisis since the country's financial sector is not well connected with the global financial system. During the financial crisis, India also not able to get away from the reverberation of the financial crisis as it moves on into worldwide economic downswing. The study helps to identify positive & negative impacts related with economic stimulus programs enforced by the Indian Government in 2020 during covid situation. Government of almost every country tried to contrive different types of economic stimulus packages to tackle the pandemic situation. After careful analysis, it becomes apparent that India is successful in developing policy measures in order to achieve harmonious equilibrium between conflicting sensual horizons. The reason behind progress of Industrial sector is the formulation of Atma Nirbhar Bharat Programme, Make-in India Project, reduction of corporate tax rates, etc. Our main focus during this study is to analyze the impact of government stimulus packages on Public sector banks & Government organizations, special focus on MTNL

Covid-19 and Bangladesh: A Study of the Public Perception on the Measures Taken by the Government

Abstract: After the eruption of Covid-19 pandemic in early 2020, every country had to fight this virus with whatever measures they could take as a prompt response. Due to resource constraints, the third world governments could not provide sufficient opportunities for their people. Bangladesh despite having many limitations has taken some effective measures in tackling this virus including stimulus packages, free testing, free treatment and free vaccination. Besides, there are measures which were taken on a limited scale in the immediate phase of the epidemic in 2020. The measures which were taken by the government were not properly communicated to the public properly. This lacuna of communication has allowed disinformation to spread widely. This study has attempted to understand how people perceived the government measures and to what extent they were satisfied with the initial measures (March and April 2020). Conforming to the consideration of the pandemic as a war, this research contends that the actions taken by the various agencies of the state could have been taken beforehand. In addition, much robust processes were necessary to prevent this pandemic at the very early stages. This paper understands that if the government could ensure improved inter-organisation coordination; the curve of infection could have been lower with proper preventative measures such as lockdown, social distancing and aftercare treatment. The amount of time Bangladesh got before the pandemic hit in Bangladesh could have been utilised to strengthen the existing hospitals and health care facilities which subsequently could help the government to fight the pandemic in a more holistic way. Finally this study presents a list of policy recommendations so that Bangladesh can counter any further pandemic with a proper policy plan.

Irrigation Technology Interventions as Potential Options to Improve Water Security in India and Africa: A Comparative Review

Water is an essential resource for the realization of the United Nations’ 2030 Sustainable Development Goals. The increasing global food insecurity, hunger, human population, and uneconomical extraction and use of non-renewable resources require, among other things, a substantial intensification of agricultural production. In this context, there has been a need to adopt irrigation technologies, especially in developing countries where agriculture and its allied sectors employ more than 50% of the total population but account for up to 90% of the total freshwater consumptive use. India and Africa are at the crux of this conundrum, where there is an urgent need to build resilience with the already excessively allotted water resources. Innovative and water-efficient irrigation technologies could be one of the windows of opportunity to overcome water scarcity and enhance food security in these regions. This review sought to comparatively explore how irrigation technological interventions could help overcome water security challenges in India and Africa. Literature retrieved from multidisciplinary electronic databases indicated that, as part of the global south, both India and Africa have untapped irrigation potential due to the adoption of individual-centric irrigation. The irrigation approaches that possess the capacity to increase water and food security as well as reduce poverty levels in India and Africa are broadly grouped into micro-irrigation technologies, renewable energy-powered irrigation technologies, flood recession agriculture, and underground transfer of surface flood water for irrigation. Unlike in India, where overexploitation or extraction is the primary driver of water scarcity (physical scarcity), water insecurity in Africa results from poor management (economic scarcity). The adoption of the foregoing interventions is challenged by existing cultural and land tenure issues, limited access to efficient irrigation technologies and credit services, as well as an overreliance on national governments for support. Despite these challenges, opportunities exist for smallholder irrigation expansion. This study indicates that both Indian and African governments ought to offer stimulus packages that encourage holistic farmer-centric irrigation technologies to improve food and water security.

COVID-19 emergency income grant and food security in Namibia

ABSTRACT This paper evaluates the effects of the government's COVID-19 economic stimulus and relief package (emergency/one-off income grant of ND750) on household food security in Namibia during the period of the lockdown. The analysis reveals that a household that received the income grant ($42 equivalent) experienced about 11%−17% reduction in food insecurity compared to their non-recipient counterparts. We also found that the effect was relatively higher in female-headed households than in male-headed households. The positive effect is supported by a higher proportion (53%) of the beneficiary households who were satisfied with the policy. These findings underscore the need for the government of Namibia to institutionalise and sustain the income grant policy as a safety net and extend it to cover other vulnerable households in the post-pandemic. Such a programme should be gender-responsive and targeted at household heads who make decision over food consumption and other household arrangements for a bigger impact.

South Africa and Covid-19 Pandemic: Unpacking the Strategies of Management and Control

South Africa at 6th September, 2021 recorded 2,824,063 cases of people with corona virus and 83,617 deaths resulting from COVID 19. It made over 1700 arrest to enforce strict compliance to the lockdown imposed on the country when the case started and has increased stimulus packages for companies and individuals to cushion the effect of lockdown on the economy. It has also increased the capacity for testing and has since eased the lockdown initially imposed on the country. Away from few cases of African countries such as Botswana and Tanzania, South Africa has adopted a methodology for managing COVID 19 pandemic that seems to be a direct adaptation from the advanced countries of the United States, France and the United Kingdom. This study using qualitative and participant observation methods investigates the process of managing the pandemic in South Africa, the extent to that has helped to flatten the curve of the spread and the impact it has on the people and the economy of South Africa generally. It probes further to query if there are homegrown alternatives that may be best suited to containing and managing situations of this nature going forward.

Exploring Indicators for Sustainable Shovel-Ready Projects: A Systematic Literature Review

This paper presents a rapid systematic review of the indicators and taxonomies of the best practices and governance for construction professionals within small and medium enterprises (SMEs) concerning the management of the sustainability goals of shovel-ready projects and infrastructure stimulus packages. The literature in this field is voluminous and reasonable evidence supports its importance. However, many unknowns exist concerning the association between the sustainability agenda and indicators that are linked to stimulus objectives during the current economic slowdown. This research employed a systematic literature review of peer-reviewed articles. It analysed 660 articles and found that 186 met the study criteria. The research focused on two thematic indicators of sustainability goals in shovel-ready projects, i.e., job creation and environmental aspects. The study primarily examined practices and indicators related to small and medium enterprises (SMEs) addressing sustainability and shovel-ready project objectives. The results suggest that SMEs are more vulnerable during economic downturns and financial crises than larger enterprises. The study also argues that engaging in sustainability objectives or aspects is a competitive strategy for SMEs. Due to time constraints, the article search was limited to peer-reviewed journals published in two academic databases from 2000 to 2021, i.e., Scopus and EBSCO, and considered aspects of job creation and environmental sustainability. Important areas for further research are highlighted as part of the study outcomes. The developed indicators can be tested and verified for construction SMEs to improve sustainability practices concerning shovel-ready project goals and their implementation.

Policy instruments facilitate China’s COVID-19 work resumption

Governments worldwide have announced stimulus packages to remobilize the labor force after COVID-19 and therefore to cope with the COVID-19-related recession. However, it is still unclear how to facilitate large-scale work resumption. This paper aims to clarify the issue by analyzing the large-scale prefecture-level dataset of human mobility trajectory information for 320 million workers and about 500,000 policy documents in China. We model work resumption as a collective behavioral change due to configurations of capacity, motivation, and policy instruments by using qualitative comparative analysis. We find that the effectiveness of post-COVID-19 recovery stimulus varied across China depending on the fiscal and administrative capacity and the policy motivation of the prefecture. Subnational fiscal and procurement policies were more effective for the wholesale and retail sector and the hotel and catering sector, whereas the manufacturing and business services sectors required more effort regarding employment policies. Due to limited prefectural capacity and wavering policy motivation, the simultaneous adoption of fiscal, employment, and procurement policy interventions endangered post-COVID-19 work resumption. We highlight the necessity of tailored postcrisis recovery strategies based on local fiscal and administrative capacity and the sectoral structure.

Reconstructing #NotMyPM from the #backdoorgovernment: a social actor analysis of Muhyiddin Yassin

In March 2020, Muhyiddin Yassin assumed power following Mahathir Mohamad’s resignation. However, his rise to office triggered significant backlash, with the hashtag “NotMyPM” trending on Twitter, reflecting widespread public discontent. This sentiment was rooted in the perception that his ascendancy contravened the people’s mandate and the democratic values upheld in Malaysia, resulting in his government being dubbed the ‘backdoor government.’ Amid the dual challenges posed by the Covid-19 pandemic and a pivotal moment for democracy, this paper contends that a strategically constructed portrayal of Muhyiddin Yassin possesses the capacity to sway public sentiment directly or indirectly, thereby reshaping negative perceptions of his government. Drawing on van Leeuwen’s socio-semantic Social Actor Representation (SAR) framework, we analyze the strategies employed by the local news sites in their portrayal of Muhyiddin Yassin when reporting his first speech as prime minister on the second Economic Stimulus Package (ESP) in March 2020. The findings unveil a consistent utilization of distinct linguistic features and strategies across various online news platforms, effectively contributing to the cultivation of Muhyiddin Yassin’s image as a responsible and trustworthy leader.

Natural resources and green economic recovery in responsible investments: Role of ESG in context of Islamic sustainable investments

This study investigates the dynamic interactions between fossil fuel-free, ESG, and carbon-efficient investments and government stimulus in Europe before and after COVID-19. Using time-varying analysis, results show ESG investments benefited most from stimulus packages when looking at average performance. However, separating pre- and post-pandemic periods revealed more nuanced results. Pre-COVID, least-volatile carbon-efficient companies spilled over to stimulus beneficiaries, but post-COVID they benefitted from them. Islamic-screened sustainable investments were net receivers regardless of period. In contrast, conventional ESG and fossil fuel-free industries behaved oppositely to low-risk eco-friendly firms, transmitting benefits to stimulus recipients. Causality tests confirmed spillover analysis, showing nonlinear causality from stimulus recipients to Islamic investments across conditions and low-risk climate-conscious investments at lower quantiles. In summary, this study provides new perspectives on chain reactions between government-supported firms and purpose-driven enterprises, helping recovery planners and policymakers make more informed sustainable investment decisions.

Lessons learned from poor governance: A comparison of the EU strategies for exiting the crises of 2008 and 2020

This paper analyses the EU's strategy for recovering from the economic and social consequences of the pandemic, of which the NextGenerationEU temporary stimulus package forms part. That strategy is compared to the diametrically opposite approach taken by EU institutions in the crisis of 2008. The most significant elements and economic policy references adopted in the two cases are identified. The paradigm shift in economic policy is evident, and the errors that led to a double dip in European economies in the handling of the earlier crisis have been avoided. In spite of the better discretionary response, it is argued that there is a need for a permanent, amply endowed, well-designed European stabilisation mechanism free from complexes in regard to the mutualisation of debt, so as to simplify procedures and reduce reaction times in the face of further crises.

COVID-19 economic stimulus packages, tourism industry and external debt: The influence of extreme poverty.

The COVID-19 outbreak has had a catastrophic effect on the tourism sector and poverty alleviation efforts. This is especially the case, given the crucial role the tourism sector plays in poverty alleviation and the generation of foreign exchange earnings. This study investigates the moderating influence of extreme poverty on the underlying link between the size of the tourism industry and COVID-19 Economic Stimulus Packages (ESPs) while accounting for the influence of external debt. The results show that tourism-dependent economies with a larger share of individuals living in extreme poverty introduced larger ESPs to cushion the impacts of the COVID-19 outbreak. In addition, economies with larger external debt have less fiscal and monetary leeway to alleviate the negative effects of the COVID-19 outbreak.

New thematic relationships in the green recovery literature

AbstractThis short communication contributes to the current debate by exploring bibliometric data related to green recovery policies to discover the thematic linkages driving sustainable transitions and how these linkages can be navigated to encourage a successful and rapid green transformation. Our discussion illuminated three main trajectories of recent research that deviate from pre-COVID-19 themes and trends: managing natural resources at multiple levels, technology science for raw material scarcity resolution, and advancing low-carbon policies with data-driven models. This study provides a robust evidence-based framework for policymakers as they design green stimulus packages that can effectively facilitate and give long-term support to a green recovery. Specifically, the results affirm the necessity of devising novel stimulative regulations, investing in the modification or supplement of existing infrastructure (e.g. energy storage and grid infrastructure for reliable use of renewable energy sources) and building cities that are more resource-efficient and climate-resilient. Finally, the study also underscores the advances made in related European Union legislation and identifies potential challenges associated with the green transition.

The impact of public attention during the COVID-19 pandemic

We examine the impact of public attention on the market during the COVID-19 outbreak. We use Google search engine to measure the level of public attention towards pandemic-related topics and analyze the effect on the 11 S&P sectors. Our results indicate that pandemic-related public attention has a substantial and adverse impact on the market. Furthermore, as governments often increase and announce stimulus packages during periods of heightened uncertainty and negative public attention, our findings indicate that higher levels of economic policy uncertainty, which are often accompanied by financial incentive announcements, can mitigate the negative impact of public attention.

Decomposed oil price shocks and GCC stock market sector returns and volatility

This study investigates dynamic mean and tail-based connectedness between decomposed oil price shocks (demand shock, supply shock, and risk shock) and Gulf Cooperation Council (GCC) stock returns and volatility at the aggregate and sectoral levels of stock data. The sample period is January 13, 2012 - January 14, 2022, covering calm and turbulent periods. The results of mean-based connectedness show generally low levels of connectedness over the full sample period for both return and volatility, despite some time-variation and irregularity in the patterns of connectedness across stock sectors. Total, directional, and pairwise connectedness measures surge significantly during Phase 1 of COVID-19, highlighting the pandemic's influence on the oil shocks–GCC stocks nexus. However, Phase 2 of COVID-19 displays a gradual reduction in return and volatility connectedness, which could be attributed to fiscal stimulus and COVID19 relief packages adopted by policymakers to contain the adverse impact of the virus on the economy. Quantile-based connectedness measures reveal evidence of heterogeneity in the impacts of oil shocks across the various quantiles of stock sector returns and volatility. Unlike supply shock, demand shock is a net transmitter of spillovers, irrespective of the quantiles. Volatility connectedness is stronger at the high volatility state than the moderate and low volatility states for all sectors, but strongest for the industrials sector. The results indicate that modelling oil shocks and GCC stock sector returns and volatility should concentrate on the most influential oil shocks (e.g. demand shock) affecting the lower and upper quantiles of sector returns and upper quantiles of sector volatility, especially for the industrials. The findings have implications for improving portfolio risk management and regulatory procedures, which should be necessary to address spillover effects from decomposed oil shocks in the stock markets of oil-exporters such as GCC countries.

Operationalising social protection: Reflections from urban India

A global pandemic has brought renewed attention to an old question: what do we owe each other? Calls to engage in thinking about a ‘new social contract’ have emerged rooted both in an intimate memory of crisis as well as in the possibilities rooted in relief work, mutual aid and stimulus packages. Scholars have sought to learn, for example, what relief measures could teach us about social protection in a ‘post-pandemic’ world, even while cautioning that socio-economic inequalities were only revealed rather than caused by the pandemic. Drawing on a set of empirical cases collectively produced by researchers (including this author) at the Indian Institute for Human Settlements, Bangalore, this article turns to a specific part of any social contract: the design and operation of social protection systems. Within this, it argues that operational modes of delivering social protection need specific attention within scholarly debates, especially in their complexities within the spatial and economic informality that marks cities of the global south. Put simply: how we deliver both existing and new entitlements is as important as deciding what entitlements urban residents should be entitled to. I offer four main operational concerns that mark the delivery of social protection to informal workers in urban India: (a) residence as an operational barrier; (b) workplaces as sites of delivery; (c) working with worker organisations as delivery infrastructures; and (d) building systems of recognition and registration of informal workers.

Credit stimulus and corporate excess employees

This study examines how the large and unexpected Chinese credit stimulus in 2008 affects firms' labor decision. Using a large sample of industrial firms, we find that state-owned enterprises tend to hire more employment than their counterparts after the credit stimulus. Mechanism analysis shows that the credit stimulus package is followed by lower financing costs and more bank loans for the state-owned enterprises, enhancing the degree of their excess employment compared with their counterparts. Moderating effect tests suggest that the overemployment effect is stronger in provinces with a high unemployment level, where the political leaders have stronger promotion incentives, in industries that are selected as the key stimulating industry, and in provinces with higher bank competition level, but weaker in provinces with higher marketization level. Finally, we find that the firm's overemployment caused by the credit stimulus plans decreases firm labor productivity. Overall, our findings shed light on how credit policy influence firms' labor decision and offer important implications for regulators.

Fiscal or monetary? Efficacy of regulatory regimes and energy trilemma of the inflation reduction act (IRA)

This paper examines the relative effectiveness of fiscal and monetary policies in achieving the goals of the Inflation Reduction Act of 2022 (IRA), a historic legislation that addresses the energy trilemma of security, inflation, and sustainability, while also promoting growth and employment in the U.S. The IRA relies mainly on fiscal measures, such as subsidies and stimulus packages, which can create deficit or surplus depending on the tax revenues. However, some of the IRA goals, such as inflation, growth, and employment, are largely influenced by monetary factors, which suggests the possibility of using monetary policies as alternative or complementary instruments in the IRA. Using a macroeconomic model, we compare the impacts of fiscal and monetary policies on the IRA outcomes and find that the monetary policy is more effective than the fiscal policy in achieving the IRA objectives, especially in the post-covid period. Our results have important implications for policymakers who need to evaluate the optimal policy mix for the successful implementation of the IRA.