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The fiscal response to the Italian COVID-19 crisis: A counterfactual analysis

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  • Di Bartolomeo, Giovanni
  • D'Imperio, Paolo
  • Felici, Francesco

Abstract

The COVID-19 pandemic is an unprecedented worldwide event with a massive impact on the economic system. The first Western country that had to face the COVID-19 crisis was Italy, which therefore represents a natural “case study.” By using the microdata and granular policy information available at the Italian Ministry of Economy and Finance, this paper provides a macroeconomic quantitative assessment of the initial emergency fiscal measures introduced in 2020 and an analysis of the impact of the COVID-19 shock during the lockdown. We find that emergency measures avoided an additional fall of GDP of about 4.4% in 2020. The impact of public interventions on the dynamics of investments is particularly significant.

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  • Di Bartolomeo, Giovanni & D'Imperio, Paolo & Felici, Francesco, 2022. "The fiscal response to the Italian COVID-19 crisis: A counterfactual analysis," Journal of Macroeconomics, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:jmacro:v:73:y:2022:i:c:s0164070422000441
    DOI: 10.1016/j.jmacro.2022.103447
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    2. Serghei PETIGHIN, 2024. "Pandemic-resilient investment policies: lessons learned from the COVID-19 crisis," Romanian Journal of Economics, Institute of National Economy, vol. 58(1(67)), pages 117-132, June.
    3. Pierpaolo Benigno & Paolo Canofari & Giovanni Bartolomeo & Marcello Messori, 2024. "The Spectre of Financial Dominance in the Eurozone," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 10(1), pages 59-80, March.
    4. Riccardo Tilli & Paolo D'Imperio & Cristiana Fiorelli, 2023. "Fiscal policy response to the COVID-19 pandemic in the euro area," Economics Bulletin, AccessEcon, vol. 43(1), pages 366-372.
    5. Giorgio Di Pietro, 2022. "Changes in household income during COVID-19: a longitudinal analysis," SN Business & Economics, Springer, vol. 2(10), pages 1-20, October.
    6. Pierpaolo Benigno & Paolo Canofari & Giovanni Di Bartolomeo & Marcello Messori, 2021. "Financial Dominance in the Pandemic and Post-Pandemic European Economy," Working Papers in Public Economics 206, Department of Economics and Law, Sapienza University of Roma.

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    More about this item

    Keywords

    COVID-19; Coronavirus; Macroeconomic impact; Fiscal policies; Lockdowns; Fiscal-policy-study case;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

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