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The Effectiveness of Fiscal-Budgetary Measures to Counteract the COVID-19 Crisis. Evidence from EU Countries

Author

Listed:
  • Dornean Adina

    (Department of Finance, Money and Public Administration, “Alexandru Ioan Cuza” University of Iași, Iași, Romania)

  • Oanea Dumitru-Cristian

    (Department of Money and Banking, The Bucharest University of Economic Studies, Bucharest, Romania)

Abstract

The aim of this study is to analyse the fiscal-budgetary measures, which have been taken by almost all governments around the world, including EU countries, in an attempt to limit the negative impact of the pandemic blockade. In most cases, these measures concerned the granting of technical unemployment, the postponement of tax payments, and the suspension or postponement of loan instalments or their maturity. The present study focuses especially on tax and expenditure measures that EU countries have introduced in response to the COVID-19 crisis. With this purpose, a paired sample t-test and multiple linear regression are used based on balanced panel data for the 27 EU countries for the period 2000Q1–2020Q3. The obtained results show that COVID-19 crisis had a significant negative impact on GDP growth. At the same time, a significant increase in public debt and government deficit occurred due to COVID-19 crisis. However, resuming the findings, the intensity, and implicitly, the effect of these measures depends on the specifics of each economy.

Suggested Citation

  • Dornean Adina & Oanea Dumitru-Cristian, 2022. "The Effectiveness of Fiscal-Budgetary Measures to Counteract the COVID-19 Crisis. Evidence from EU Countries," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 16(1), pages 137-151, January.
    • Handle: RePEc:bpj:econoa:v:16:y:2022:i:1:p:137-151:n:13
    DOI: 10.1515/econ-2022-0024
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    References listed on IDEAS

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    More about this item

    Keywords

    COVID-19 crisis; expenditure measures; tax measures;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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