Stimulus Package Research Articles

When All Hands Are Not on Deck: Intergovernmental Relations and the Fight against COVID-19 Pandemic in the Nigerian Federation

ABSTRACT The defects and susceptibility of the Nigerian federalism are more pronounced at this period of the Covid-19 pandemic. Existing studies are yet to articulate how the states, in the formulation and enforcement of the lockdown and physical distancing policies, infringed on the federal exclusive matters by closing land borders, airports and imposing partial banking services. There is selective provision/distribution of healthcare facilities and stimulus packages and palliatives across the states by the federal government. The objective of this study is to examine how the conflicting nature of intergovernmental relations is implicated in the level of implementation of containment policies/strategies towards the fight against the Covid-19 pandemic in Nigeria. Based on content analysis and the functional-process theory, the article argued that the cantankerous/imploding disconnects between the federal and state governments–obscuring the making and implementation of harmonised and coordinated pandemic containment policies–constitute key impediment to the fight against Covid-19 in Nigeria.

Policy reactions to the Covid-19 pandemic: an overview of political and economic influences across Europe

Abstract The reactions of the respective governments of the European Union both to the sanitary and economic risks of the Covid-19 pandemic varied tremendously. The objective of this paper is to explain the variation in lockdown and economic measures by political and institutional factors. Both the respective restrictive and economic measures throughout the European Union are presented. The first unit of the paper consists of a literature review of political factors (such as institutional structures and capacities, ideology and the effect of upcoming elections) that may have influenced the stringency of the restrictive measures introduced. As no previous study researched the effects of the above factors on the magnitude of economic packages, a regression analysis was conducted to examine if political ideology, democratic freedom and the timely proximity of elections influenced the extent of economic aid. While these factors could not prove to show significant influence on the extent of economic stimulus packages, several possible explanations are provided in order to understand the relative homogeneity of fiscal and monetary intervention in the EU.

Washington view: Federal stimulus packages: Act II

As education leaders are making plans for how to use American Rescue Plan funds, Maria Ferguson considers what lessons they might learn from the American Recovery and Reinvestment Act in 2009. Like the tranches of funding being provided to schools as COVID relief, the ARRA funds were meant to help schools grapple with a national crisis, in that case the Great Recession. To receive funds, states had to commit to certain reforms that aligned with President Barack Obama’s education agenda. However, the funds were not enough to enable state, district, and school leaders to accomplish the desired goals, and the political heat generated by the Common Core State Standards didn’t help. Today’s funds come with more flexibility than in the ARRA era, but, once again, money may not be enough to accomplish what’s needed.

The role of automatic stabilizers in business cycle: the case of indonesia

TThe use of large fiscal stimulus packages to dampen the impact of Covid-19 recently has raised concerns about the effectiveness of the discretionary fiscal policy. This paper aims at analysing the feasibility of automatic fiscal stabilisers to mitigate economic fluctuations in the case of Indonesia. Using the IMF standard model for quarterly data over the period of 2001(1) to 2019(4), we find that the role of automatic fiscal stabilisers is getting greater both in revenue and spending. This implies that the automatic fiscal stabilisers are feasible as the main fiscal policy instrument for economic stability goals in the future. However, given the existing circumstances, Indonesia has to reform economic, regulatory, and institutional ecosystems in adopting the automatic fiscal stabilisers.

PANDEMIK COVID-19: PENDEKATAN KERAJAAN MALAYSIA DALAM MENGURUS KESELAMATAN NEGARA

Severe Acute Respiratory Syndrome 2 (SARS-CoV-2) coronavirus or better known as Covid-19 was first detected on 17 November 2019 in Hubei province, China, and was declared a pandemic by the World Health Organization (WHO) on 11 March 2020. Until 1 November 2020, the Covid-19 pandemic has spread to 215 countries worldwide where the total number of cases recorded is 45,942,902 cases and 1,192,644 deaths. In Malaysia, a total of 31,548 cases and 249 deaths were recorded. The Covid-19 pandemic has caused economic paralysis and affected the lives of communities around the world. The main objective that will be discussed in this article is the Malaysian government's approach in dealing with the Covid-19 pandemic to ensure that the country's socio-economy is not affected where it could affect national security. In this article, the method of collecting information is through references in websites, e-journals, e-newspapers, and related reports. The results show that the Malaysian government has taken two main approaches in managing national security, namely through the health and economy of the people. The health approach is through efforts to curb the Covid-19 epidemic from spreading further in the country which can have a negative impact on the economy and society of Malaysians. Next, the people's economic approach implemented is through the People's Economic Stimulus Package announced by the government to help the people affected by the Covid-19 epidemic and ensure that the country's economy can be restored. This approach has succeeded in maintaining national peace as well as preventing the occurrence of things that could affect national security such as riots or demonstrations by the people due to dissatisfaction with the government.

Parent-subsidiary dispersion, cost of debt and debt default: Evidence from China

This paper examines whether parent-subsidiary dispersion affects the cost of debt. Prior literature is silent on the relationship between firms' locations and debt cost in the unique setting of the Chinese credit market. Using a comprehensive dataset of Chinese A-share listed firms during 2003–2019, we find that geographical and institutional dispersion between parent companies and their subsidiaries are positively associated with debt cost. This effect is more pronounced for firms: (a) with fewer government subsidies, (b) without political connections and (c) with male CEOs/chairman. However, this effect is not significant for (i) firms cross-listed on B or H share and (ii) for firm-level observations during the implementation of the 4 trillion stimulus package. Lastly, while testing for plausible channels, we find that parent-subsidiary dispersion can increase the debt default by raising debt cost. Overall, these findings provide new evidence on how a firm's geographical dispersion can determine debt financing costs.

The Impact of the COVID-19 Crisis on The Role of Mothers Towards Their Disabilities Children

The Coronavirus Disease 2019 (COVID-19) crisis has affected Saudi women's daily lifestyle, contributing significantly to increasing pressure on women to have multiple roles both at home and at work. The study therefore aimed to identify the role of women towards their children with disabilities during the COVID-19 epidemic crisis by identifying their roles towards their children with disabilities in the educational, psychological and social aspect. The study used the quantitative approach (social survey). The sample of the study consisted of (336) Saudi mothers of children with disabilities in the southern region of Saudi Arabia with an average age of (35.8) years. A questionnaire was built to identify the role of Saudi women towards their disabled children during the crisis and was developed by the researcher. The results indicated that the role of Saudi women towards their disabled children during the COVID-19 epidemic crisis was of a high level in all areas of practice for the tool. The analysis of the data to answer the main question in the study also revealed the importance of the educational, psychological and social role of Saudi women towards their children with disabilities during the COVID-19 epidemic crisis within the family. In light of these findings, the study recommended the importance of urging responsible people to provide a range of rescue and stimulus packages that also include social protection measures, seeking to empower Saudi women in all sectors of society, and providing them with all means of support to help them achieve their role in society in general.

COVID-19 Pandemic: Health Challenges and a Critical Study of the Structure of the Nigeria Economy

Sub-Saharan Africa has been characterized as having a high prevalence of malaria and HIV. The present COVID-19 outbreak compounds and complicates Nigeria’s health and socio-economic problems that require stringent public health measures, improved health facilities and achievable economic policies to tackle. The impact of COVID-19 on national economies depends on the level of preparedness and responsiveness to shocks. This perspective dissected the structure of the Nigerian economy and the effect of the pandemic on Nigeria’s economy, having given mild health implications. The study adopted an exploratory research design and thus, relied on the past socio-economic situation in Nigeria to explain how Nigeria was affected by the pandemic. This perspective concludes that the socio-economic foundation in Nigeria is weak. These weak socio-economic settings have made the economy vulnerable to external and internal shocks. This study recommends that the Nigerian government provide adequate and internationally standard training facilities for her health workers and ensure that they are paid well and as when due. To build a resilient economy that can survive external and internal shocks, there is a need to diversify the economy’s economic base fully. Alongside achieving economic diversification, there is the need to improve the existing agricultural-industrial link. The Central Bank should adopt effective monetary policy measures to facilitate credit to private sectors to promote investment in key sectors in the economy. There is a need to increase stimulus package for all industries and households to sustain and improve employment and consumption levels. There is a need to improve efficiency in government spending. The government should sincerely invest in infrastructures to reduce the cost burden on the private sector. Furthermore, there is a crucial need to increase government investment in the health and education sector to prepare the nation for any other health emergency and build its human capital.

Theory vs. Practice: Does Fiscal Policy Crowd Out Business Investment during Crises?

In 2020, the South Korean government aimed to mitigate the socio-economic impact of the COVID-19 pandemic by enacting a fiscal stimulus package worth 66.8 trillion won. Traditional economic theory warns that such deficit-financed expansionary fiscal policies can have the adverse effect of crowding out business investment, but the current literature is more divided: some argue that the crowding-out effect outweighs the multiplier effect of fiscal stimulus; some claim that the two effects cancel each other out; and others assert that the scale of crowding out is small, at least in recessions. It is important to study the existence and scale of crowding out during recessions to evaluate the soundness of fiscal policies as a countercyclical tool. Thus, this paper examines whether Korea’s fiscal policy crowded out business investment during two severe economic downturns: the “great recession” of 2008 and the “great lockdown” of 2020. The paper uses a cross-time case comparison of the two economic crises in the hopes of drawing generalizable conclusions for South Korea over time. The findings show that Korea’s facility investment continued to increase during the recent pandemic but decreased during the 2008 financial crisis. Was this due to crowding out? Further analysis suggests that the decrease in investment during the 2008 crisis was due to factors other than crowding out. Hence, the paper concludes that Korea’s fiscal responses to the two crises did not crowd out business investment and thus encourages the continued use of appropriately sized and targeted fiscal stimulus during recessions.

International Economic Law and the COVID-19 sanitary crisis: an introduction

The sanitary crisis has already had a substantial influence on the global economy, with restrictions on sanitary material exports, interruption of international transportation, increased screening of foreign investment, and challenges to intellectual property rights. It has compelled states to reconsider their core interests and national security, for example, in terms of maintaining pharmaceutical and vaccine manufacturing capacity. In addition, the lockdowns adopted in many countries have raised questions about their conformity with the existing free trade and investment treaties, and about the rationale of exceptions and derogations in these treaties. The economic consequences of the crisis have resulted in huge stimulus packages by national governments, putting a strain on the public exchequer and increasing debt. Financial experts also anticipate that the public debt to GDP ratio of most developed as well as emerging nations would further skyrocket and therefore the IMF, development banks, and other international financial institutions have been mobilized to meet the current and forthcoming financial needs of the most affected economies. Consequently, these diverse topics need a legal discussion, with an emphasis on the States' unique reactions and practices in their economic interactions, as well as the possibility of a post-COVID-19 world economic order.

COVID-19 impact: Customised economic stimulus package recommender system using machine learning techniques

Background: The Malaysian government reacted to the pandemic’s economic effect with the Prihatin Rakyat Economic Stimulus Package (ESP) to cushion the novel coronavirus 2019 (COVID-19) impact on households. The ESP consists of cash assistance, utility discount, moratorium, Employee Provident Fund (EPF) cash withdrawals, credit guarantee scheme and wage subsidies. A survey carried out by the Department of Statistics Malaysia (DOSM) shows that households prefer different types of financial assistance. These preferences forge the need to effectively customise ESPs to manage the economic burden among low-income households. In this study, a recommender system for such ESPs was designed by leveraging data analytics and machine learning techniques. Methods: This study used a dataset from DOSM titled “Effects of COVID-19 on the Economy and Individual - Round 2,” collected from April 10 to April 24, 2020. Cross-Industry Standard Process for Data Mining was followed to develop machine learning models to classify ESP receivers according to their preferred subsidies types. Four machine learning techniques—Decision Tree, Gradient Boosted Tree, Random Forest and Naïve Bayes—were used to build the predictive models for each moratorium, utility discount and EPF and Private Remuneration Scheme (PRS) cash withdrawals subsidies. The best predictive model was selected based on F-score metrics. Results: Among the four machine learning techniques, Gradient Boosted Tree outperformed the rest. This technique predicted the following: moratorium preferences with 93.8% sensitivity, 82.1% precision and 87.6% F-score; utilities discount with 86% sensitivity, 82.1% precision and 84% F-score; and EPF and PRS with 83.6% sensitivity, 81.2% precision and 82.4% F-score. Households that prefer moratorium subsidies did not favour other financial aids except for cash assistance. Conclusion: Findings present machine learning models that can predict individual household preferences from ESP. These models can be used to design customised ESPs that can effectively manage the financial burden of low-income households.

COVID-19 impact: Customised economic stimulus package recommender system using machine learning techniques

Background: The Malaysian government reacted to the pandemic’s economic effect with the Prihatin Rakyat Economic Stimulus Package (ESP) to cushion the novel coronavirus 2019 (COVID-19) impact on households. The ESP consists of cash assistance, utility discount, moratorium, Employee Provident Fund (EPF) cash withdrawals, credit guarantee scheme and wage subsidies. A survey carried out by the Department of Statistics Malaysia (DOSM) shows that households prefer different types of financial assistance. These preferences forge the need to effectively customise ESPs to manage the economic burden among low-income households. In this study, a recommender system for such ESPs was designed by leveraging data analytics and machine learning techniques. Methods: This study used a dataset from DOSM titled “Effects of COVID-19 on the Economy and Individual - Round 2,” collected from April 10 to April 24, 2020. Cross-Industry Standard Process for Data Mining was followed to develop machine learning models to classify ESP receivers according to their preferred subsidies types. Four machine learning techniques—Decision Tree, Gradient Boosted Tree, Random Forest and Naïve Bayes—were used to build the predictive models for each moratorium, utility discount and EPF and Private Remuneration Scheme (PRS) cash withdrawals subsidies. The best predictive model was selected based on F-score metrics. Results: Among the four machine learning techniques, Gradient Boosted Tree outperformed the rest. This technique predicted the following: moratorium preferences with 93.8% sensitivity, 82.1% precision and 87.6% F-score; utilities discount with 86% sensitivity, 82.1% precision and 84% F-score; and EPF and PRS with 83.6% sensitivity, 81.2% precision and 82.4% F-score. Households that prefer moratorium subsidies did not favour other financial aids except for cash assistance. Conclusion: Findings present machine learning models that can predict individual household preferences from ESP. These models can be used to design customised ESPs that can effectively manage the financial burden of low-income households.

The forgotten ocean: Why COP26 must call for vastly greater ambition and urgency to address ocean change

Abstract Of all the interconnected threats facing the planet, the top two are the climate and the biodiversity crises. Neither problem will be solved if we ignore the ocean. To turn the tide in favour of humanity and a habitable planet, we need to recognize and better value the fundamental role that the ocean plays in the earth system, and prioritize the urgent action needed to heal and protect the ocean at the ‘Earthscape’ level – the planetary scale at which processes to support life operate. The countries gathering at COP26 have unparalleled political capacity and leadership to make this happen. COP26 could be the turning point, but there must be commitment to united action for the ocean, as well as planning to meet those commitments, based on science‐led solutions that address the interconnectivity of the ocean, climate, and biodiversity. Key ways in which the ocean both contributes to and acts as the major buffer for climate change are summarized, focusing on temperature, but not forgetting the role of storing carbon. It is noted with ‘high confidence’ that the ocean has stored 91% of the excess heat from global warming, with land, melting ice, and the atmosphere only taking up approximately 5, 3, and 1%, respectively. We also highlight the impact of the recent large release of heat from the ocean to the atmosphere during the 2015–2016 El Niño. We then present six science‐based policy actions that form a recovery stimulus package for people, climate, nature, and the planet. Our proposals highlight what is needed to view, value, and treat the planet, including the ocean, for the benefit and future of all life.

Unbending the Winding Path of a Low-Income Country’s Energy Sector amid the COVID-19 Pandemic: Perspectives from Malawi

This paper discusses the impact of COVID-19’s vulnerability context on Malawi’s Energy Sector and outlines mechanisms for enhancing Malawi’s energy-sector resilience based on experiences from a range of stakeholders. The investigation was conducted online by inviting purposively selected stakeholders to create presentations responding to thematic questions. The final sample had 19 stakeholders with representation from policy-makers, regulatory bodies, national grid supply players, off-grid players, development agencies, bankers, professional bodies, civil society, and women’s rights bodies. The presentations from the stakeholders highlighted how COVID-19 affects the operation costs of energy systems and implementation of energy systems projects in areas that require stimulus packages to contain energy system delivery costs and prevent disruption of essential services amid the COVID-19 pandemic. These services include stakeholder responses to COVID-19 in the energy sector, the role of digital payments particularly when purchasing electricity units, and the state of third-party service providers such as banks and mobile network operators to enhance preparedness and continuity of operations for the energy sector. Based on the findings in these thematic areas and an application of systems thinking in the analysis, the paper finally makes recommendations on how Malawi and similar low-income countries can strategise to enhance energy systems resilience.

The SOE Channel of Monetary Policy Transmission: Evidence from China's Economic Stimulus Package

Abstract We examine the state-owned enterprises (SOEs) channel in monetary policy transmission in the context of China's 2008 stimulus package. Using a difference-in-difference approach, we show that the higher SOE share in the cities after the stimulus package, the more bank loans issued in the cities. Furthermore, we find that the role of SOEs in monetary policy transmission is more significant in underdeveloped cities and cities with a high level of government intervention. We adopt propensity score matching difference-in-difference to deal with potential endogeneity problem. The baseline results also survive a series of robustness tests.

When the Pandemic Creates Behavioral Changes and Economic Crisis: The COVID-19 Pandemic and the Implications for Policy Making

The COVID-19 pandemic is no longer simply a “health crisis” but seems to have far-reaching impacts and implications as well. The pandemic has led to an unprecedented decline in consumer confidence (demand shock) as people quickly changed their spending behavior to focus on basic needs. In response, the government has taken actions to boost consumer confidence and spending through stimulus packages and other aid. This research uses a public database of private sector data with current information on consumer spending and employment and implements Abraham Maslow’s psychological theory, the hierarchy of needs, and Keynesian economics to explain consumer spending behaviors and the U.S. government’s response to the pandemic. Three hypotheses are developed and tested using regression analysis. First, the findings of the regression discontinuity show significantly higher spending in industries fulfilling basic needs than in nonessential sectors. Second, a causal relationship was found between aggregate demand, more specifically consumer spending, and employment, revealing the distinctness of the pandemic-caused recession driven by coronavirus fear. The final regression discontinuity was tested to observe the effect of stimulus checks (CARES Act) on spending and economic recovery, revealing positive impacts of boosting aggregate demand. This study provides evidence that while high-income households and individuals were the least impacted by the pandemic regarding employment, they showed the most dramatic changes in spending behavior. The study provides discussions and implications as to how to mitigate the effects of the COVID-19 recession in the U.S.

Socially responsible investment (SRI) Sukuk as a financing alternative for post COVID-19 development project

PurposeCOVID-19 has disrupted the economic development of both advanced and emerging markets. In addition to the stimulus packages to adjust the economic shock from COVID-19, regulators around the world are searching for innovative mechanisms to rebuild the economy. The purpose of this paper is to explore the potential of SRI Sukuk to serve as an Islamic social finance solution for development projects to mitigate the adverse economic effects of COVID-19.Design/methodology/approachThis study uses a mixed-method research framework. The authors use a systematic literature review following the recommendations of Bowen (2009) to identify critical challenges financing PPP projects using SRI Sukuk. In the next phase, the authors interview participants involved in an SRI Sukuk financed PPP project to get more significant insights on the challenges identified through the literature review process.FindingsThe authors identify the need for greater transparency for SRI financed PPP projects. Also, organisational and legislative challenges are limiting the attractiveness of SRI Sukuk as a financing mechanisms for post-COVID development projects.Practical implicationsSRI Sukuk is an emerging financing concept, and the use of such an Islamic financial instrument in financing development projects can serve as a viable alternative for policymakers in a post-COVID economic environment.Social implicationsThe successful completion of the development projects integrating the concept of Social Maslahah through SRI Sukuk in Malaysia could encourage other emerging economies to use such innovative Islamic financial instrument for economic development in post-COVID environment.Originality/valueThis paper is unique, as it provides evidence on the potential of SRI Sukuk to finance large scale public-private partnership projects.

Will COVID-19 Threaten the Survival of the Airline Industry?

The pandemic causes social distancing and lockdown, which impedes consumer confidence and contracts the economy. Hence, this study analyzes the corona (COVID-19) impact on the airline industry revenues (ALR) and forecast by the vector autoregression (VAR) method. The results indicate that gross domestic product (GDP) and air cargo are the best predictors of ALR. The forecasting outcomes explore if ALR will decline and expect to back to pre-COVID-19 in 2023. Our results resemble both the V-shaped and U-shaped, which suggests slow gradual recovery with longer lockdown and border disclosure. The government can restore confidence building by providing economic stimulus packages and can encourage the airline to return to travel. Furthermore, softening the passenger rules concerning the refund of unflown ticket, reducing taxes, and reducing overflight taxes, all reduce the costs. Similarly, the mutually recognized global standards are crucial for effective execution, and any temporary measures taken by the government should have a clear exit strategy. The study major limitation includes the lack of relevant research and data availability.

Circular Economy and Energy Materials: A Strategy Overview

Climate change mitigation with an aim towards zero carbon by 2050 will rely on the development and deployment of energy generation and storage devices. As countries plan their way out of the Covid-19 pandemic driven economic slump, they are ensuring that climate change mitigation is part of the economic stimulus package. This will certainly be a shot in the arm for ramping up technology and product development across the entire economy, a major fraction of which will be around energy generation and storage devices. Holistic thinking around sustainability is needed around this development so that we avoid seeding future crisis. We will go through a strategic overview and the need for establishing and including a Design For Circular Economy guidelines as part of DFx.

The COVID-19 Shock: A Bayesian Approach

The coronavirus crisis that started in December 2019 was declared a pandemic by March 2020 and had devastating global consequences. The spread of the virus led to the implementation of different preventive measures prior to the availability of effective vaccines. While many governments implemented lockdowns to counter the pandemic, others did not let the virus halt economic activity. In this paper, we use a Bayesian Vector Autoregressive framework to study the effects of the pandemic on prices, unemployment rates, and interest rates in nine countries that took distinctive approaches in tackling the pandemic, where we introduce lockdowns as shocks to unemployment. Based on impulse response functions, we find that in most countries the unemployment rate rose, interest rates fell or turned negative, and prices fell initially following the implementation of the lockdown measures. However, the massive fiscal and monetary stimulus packages to counteract the effects of the pandemic reversed some of the effects on the variables, suggesting that models with explicit recognition of such effects should be developed.