Poverty and income distribution incidence of the COVID-19 outbreak: investigating socially responsible policy alternatives for Turkey

To counterbalance the deep systemic global crisis triggered by the COVID-19, many countries introduced a vast arsenal of fiscal policy instruments coupled with monetary accommodation. Yet, Turkey's response had almost exclusively relied on credit expansion and loan guarantees while minimizing the role of fiscal policy. Within that context, this article has three interrelated objectives. Firstly, we evaluate the effects of the crisis and the implemented policies on poverty and income distribution. Second, we measure the macroeconomic impacts of COVID-19 on the Turkish economy through a general equilibrium model. We find that these policies had a limited impact on reducing crisis-induced poverty. Finally, we propose alternatives to mitigate the effects of the COVID-19 crisis, which are compatible with fiscal constraints. Our results suggest that by pursuing a targeted fiscal income transfer programme covering wage earners and small-sized enterprises, Turkey could have achieved a more egalitarian and effective response to the Covid-19 crisis. [ FROM AUTHOR] Copyright of Journal of Southeast European & Black Sea Studies is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full . (Copyright applies to all s.)

Lessons for the Age of Consequences: COVID-19 and the Macroeconomy

Comparative empirical evidence for 22 OECD countries shows that country differences in cumulative mortality impacts of SARS-CoV-2 are caused by weaknesses in public health competences, pre-existing variances in structural socio-economic and public health vulnerabilities, and the presence of fiscal constraints. Remarkably, the (fiscally non-constrained) U.S. and the U.K. stand out, as they experience mortality outcomes similar to those of fiscally-constrained countries. High COVID19 mortality in the U.S. and the U.K. is due to pre-existing socio-economic and public health vulnerabilities, created by the following macroeconomic policy errors: (a) a deadly emphasis on fiscal austerity (which diminished public health capacities, damaged public health and deepened inequalities);(b) an obsessive belief in a trade-off between ‘efficiency' and ‘equity', which is mostly used to justify extreme inequality;(c) a complicit endorsement by mainstream macro of the unchecked power over monetary and fiscal policy-making of global finance and the rentier class;and (d) an unhealthy aversion to raising taxes, which deceives the public about the necessity to raise taxes to counter the excessive liquidity preference of the rentiers and to realign the interests of finance and of the real economy. The paper concludes by outlining a few lessons for a saner macroeconomics.

The Moderating Effect of Social Capital on Fiscal Policy Responses to COVID-19: Cross-Country Evidence

This study suggests that an adequate level of social capital with a robust health profile might be associated with positive policy outcomes in com-bating COVID-19. We investigate the effect of interaction between fiscal policy responses and social capital on the spreading of the pandemic, by considering the country health profile, demographic and economic factors, in a cross-section of 94 countries. Firstly, the results of the analysis indicate the moderating effect of social capital on keeping the pandemic under control through fiscal policy measures. In particular, strong bilateral and family ties as well as better coordi-nation and cooperation at the community level can facilitate the goal of fiscal policy measures. The results also reveal that the declining effect of fiscal policy on the pandemic mostly arises from the relatively high social capital levels, while it loses its effectiveness at low levels. Secondly, the findings emphasize the role of behavioural risk factors, care systems and preventative interventions as prom-inent determinants of surviving in pandemic. Thirdly, we conclude that taking specific measures for identified vulnerable and high-risk groups is quite im-portant in overcoming the disease. © 2023, Savez Ekonomista Vojvodine. All rights reserved.

Two Major Economic Crises in the Early Twenty-First Century and their Impact on Central Bank Independence

Two major economic crises in the early twenty-first century have had a serious impact on monetary policy and CB independence. Disruption in financial intermediation and associated deflationary pressures caused by the global financial crisis of 2007–2009 and European financial crisis of 2010–2015 pushed central banks (CBs) in major currency areas towards adoption of unconventional monetary policy measures, including large-scale purchase of government bonds (quantitative easing). The same approach has been taken by CBs in response to the COVID-19 crisis in 2020 even if the characteristics of this crisis differ from the previous one. As a result of both crises, CBs have become major holders of government bonds and de facto – main creditors of governments. Against rapidly deteriorating fiscal balances, CBs have become hostages of fiscal policies, which compromises their independence. Risks to the CB independence also come from their additional mandates (beyond price stability) and populist political pressures.

European Stabilisation Policy After the COVID-19 Pandemic: More Flexible Integration or More Federalism?

Crises are a major driving force behind cooperation in the European Union. During severe crises, cooperation has been enlarged and intensified. The Ukrainian war and the covid-19 pandemic are two examples of this pattern, not least when it comes to the conduct of stabilization policies in the EU. In this chapter, we discuss the implications for the EU of a move towards increased fiscal federalism. First, the role of crises as a driver of political change is analysed. Next, we examine in greater detail, the effect of crises on the design of stabilisation policies in the EU since the introduction of the euro, the common currency. Finally, we discuss the significance of the recent pandemic-induced steps towards increased federalism for the EU. We raise the question as to whether this is a desirable path for the future of European cooperation. © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2023.

Public debt and r-g risks in advanced economies: Eurozone versus stand-alone

Differentials between interest rates on government bonds (r) and economic growth rates (g) are a key determinant of public debt dynamics. What are the predictors of r-g, and what risks do policy-makers face? Applying regression methods to data on 22 OECD countries over 1970-2018 shows that higher public debt levels are not predictive of more unfavourable r-g in both Eurozone and stand-alone countries, where the latter issue debt in their own currency. The Euro Crisis – a period characterised by doubts over whether the ECB would backstop government bond markets – is linked with more unfavourable r-g, but only in Euro periphery countries. Our results suggest that the Eurozone's institutional architecture affects r-g risks. While we find that predicted probabilities of future r – g < 0 are typically significantly higher than 50% across OECD economies under conditions similar to the pre-Covid-19 years, r-g risks are most significant in the Euro periphery.

How the pandemic affected interregional inequality in Russia

Analysis of trends in interregional inequality in Russia in 2015–21 and of the actual outcome during the 2020 pandemic and the subsequent recovery in 2021 reveals short-term regional convergence in seven indicators, albeit of different depth and duration. Sub-federal budget revenue experienced the most significant and persistent reduction in interregional disparities, the main sources of which were a reduction of unevenness in a number of taxes, a significant increase in federal transfers and a change in their nature. After a strong short-term convergence, industry, trade, transport and investment all tended to return to long-term divergence paths. Personal income and wage inequality responded weakly to the shock in the short term and entered the new long-term path. Multidirectional spatial trends resulted from the interaction of sectorial and fiscal policy effects during the pandemic. (English) [ FROM AUTHOR] Cómo ha afectado la pandemia en las desigualdades interregionales en Rusia. Area Development and Policy. En los análisis sobre las tendencias en las desigualdades interregional en Rusia durante el periodo de 2015 a 2021, el resultado actual durante la pandemia de 2020 y la recuperación posterior en 2021 se observa una convergencia regional a corto plazo en siete indicadores, si bien con diferencias en cuanto a la profundidad y la duración. En los ingresos presupuestales subfederales se observó la reducción más significativa y persistente en las desigualdades interregionales, siendo las principales fuentes la reducción de las desigualdades en una serie de impuestos, un aumento significativo en las transferencias federales y un cambio en su naturaleza. Tras una fuerte convergencia a corto plazo, la industria, el comercio, el transporte y las inversiones tendían a volver a las rutas de divergencia a largo plazo. Los ingresos personales y las desigualdades salariales respondieron débilmente al choque a corto plazo y entraron en una nueva fase a largo plazo. Las tendencias espaciales multidireccionales surgieron a partir de la interacción de los efectos de la política sectorial y fiscal durante la pandemia. (Spanish) [ FROM AUTHOR] Как пандемия повлияла на межрегиональное неравенство в России. Area Development and Policy. Анализ тенденций межрегионального неравенства в России в 2015–21 гг. и фактического неравенства во время пандемии 2020 г. и последующего восстановления в 2021 г. выявил краткосрочную конвергенцию регионов по семи показателям разной глубины и продолжительности. В доходах субфедерального бюджета произошло наиболее значительное и стойкое сокращение межрегиональных диспропорций, основными источниками которого стали уменьшение неравномерности по ряду налогов, значительное увеличение федеральных трансфертов и изменение их характера. После сильной краткосрочной конвергенции промышленность, торговля, транспорт и инвестиции, как правило, возвращались к долгосрочным траекториям дивергенции. Неравенство личных доходов и заработной платы слабо отреагировало на шок в краткосрочной перспективе и вступило на новую долгосрочную траекторию. Разнонаправленные пространственные тренды возникали в результате взаимодействия отраслевых эффектов и фискальной политики во время пандемии. (Russian) [ FROM AUTHOR] 流行病如何影响俄罗斯地区间不平等? Area Development and Policy. 本文分析了2015–21年间俄罗斯区域间不平等趋势、2020年爆发的流行病所造成的实际结果以及2021随后的疫情恢复情况, 研究表明七个指标在短期内区域趋同, 尽管深度和持续时间不同。联邦以下各级预算收入在区域间差异方面经历了最显著和持久的减少, 其主要来源是一些税收不平衡性减少, 以及联邦转移的显著增加和其性质的改变。在短期强劲趋同之后, 工业、贸易、运输和投资都倾向于回归长期的趋同路径。个人收入和工资不平等在短期内对冲击反应微弱, 并进入新的长期路径。多方的空间趋势是流行病期间部门和财政政策影响相互作用的结果。 (Chinese) [ FROM AUTHOR] Copyright of Area Development & Policy is the property of Taylor & Francis Ltd and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full . (Copyright applies to all s.)

What determines the tax compliance intention of individual taxpayers receiving COVID-19-related benefits? Insights from Indonesia

PurposeEven as governments worldwide take extraordinary measures and spend unprecedented amounts of their state budgets to combat COVID-19, tax compliance remains challenging. Therefore, this study employs previously identified predictors to investigate the factors that persuade individual taxpayers to comply with the law.Design/methodology/approachIndividual taxpayers in Indonesia (N = 699) who had experienced COVID-19-related benefits were asked to assess the provided evaluation regarding the tax compliance intention and its determinants. The bootstrapping analysis was employed using smart partial least squares (SmartPLS) to test the hypotheses.FindingsThe results suggest that the perceived fiscal exchange, tax morality, tax fairness, tax complexity and the power of authority are significant determinants of tax compliance intention. This study also supports the indirect effects of numerous factors on tax compliance intention through the perceived fiscal exchange and tax morality. In practice, reminding taxpayers of how tax payments fund public services, improving taxpayer morale, increasing the perceived fairness of the tax system, streamlining the tax code and managing the effectiveness of tax administration could all lead to a greater intention to comply with the law.Originality/valueIn addition to highlighting the dynamics of tax compliance amid the unprecedented pandemic crisis, our findings also provide insight into the importance of perceived fiscal exchange and tax morality for achieving and sustaining planned behavior to comply with tax rules.

Sovereign debt responses to the COVID-19 pandemic.

We utilize the global natural experiment created by the COVID-19 outbreak to identify sovereign borrowing capacity in time of need and its determinants. First, we demonstrate that the pandemic creates exogeneous shocks to sovereign borrowing needs-governments borrowed more when hit by more severe pandemic shocks. Second, we show that credible fiscal rules enhance sovereign borrowing capacity, while unsustainable debts in terms of high debt-to-GDP ratio, rollover risk, and sovereign default risk weaken it. Third, we find that, in response to the same pandemic shock, sovereign spreads increase more in emerging economies than advanced economies though the former borrow less during the pandemic. Finally, further analysis reveals that pegged exchange rate regimes, open capital accounts, and monetary dependence improve emerging economies' borrowing capacity.

Impact of COVID-19 Containment Measures on Unemployment: A Multi-country Analysis Using a Difference-in-Differences Framework

Background: At the start of the coronavirus disease 2019 (COVID-19) pandemic, in the absence of pharmaceutical interventions, countries resorted to containment measures to stem the spread of the disease. In this paper, we have conducted a global study using a sample of 46 countries to evaluate whether these containment measures resulted in unemployment. Methods: We use a difference-in-differences (DID) specification with a heterogenous intervention to show the varying intensity effect of containment measures on unemployment, on a sample of 46 countries. We explain variations in unemployment from January-June 2020 using stringency of containment measures, controlling for gross domestic product (GDP) growth, inflation rate, exports, cases of COVID-19 per million, COVID-19-specific fiscal spending, time fixed effects, region fixed effects, and region trends. We conduct further subset analyses by COVID-cases quintiles and gross national income (GNI) per capita quintiles. Results: The median level of containment stringency in our sample was 43.7. Our model found that increasing stringency to this level would result in unemployment increasing by 1.87 percentage points (or 1.67 pp, after controlling for confounding). For countries with below median COVID-19 cases and below median GNI per capita, this effect is larger. Conclusion: Containment measures have a strong impact on unemployment. This effect is larger in poorer countries and countries with low COVID-19 cases. Given that unemployment has profound effects on mortality and morbidity, this consequence of containment measures may compound the adverse health effects of the pandemic for the most vulnerable groups. It is necessary for governments to consider this in future pandemic management, and to attempt to alleviate the impact of containment measures via effective fiscal spending. © 2023 The Author(s);Published by Kerman University of Medical Sciences.

Reinstating fiscal policy for normal times: Public investment and Public Jobs Programmes

This paper upholds the classical Keynesian position that a laissez-faire market economy lacks a spontaneous tendency to full employment. Focusing on the UK case, it argues that monetary policy could not prevent the economic collapse of 2008-9 or achieve full recovery from the Great Recession that followed. The paper then outlines the case for fiscal policy to regain a permanent status of primacy in modern macroeconomic management, beyond the pandemic emergency. It distinguishes between public investment and automatic stabilisers, reducing discretionary actions to a minimum. It presents the case for re-empowering the State'spublic investment function and for reforming the system of automatic counter-cyclical stabilisers by means of public jobs programmes.

Tax literacy: what does it mean?

PurposeThis paper aims to identify the competency domains to be included in a conceptual framework for tax literacy.Design/methodology/approachUsing a qualitative approach, this study expands on the current understanding of the competency areas of tax literacy. A dual-purpose literature review was, therefore, conducted. The literature review first provided the body of knowledge that underpinned the study and second, the key data concepts for the draft competency structure to determine whether there is consensus on an international (supra) level. The literature review was supported by an interactive qualitative analysis to further present the concept of tax literacy from the perspectives of various national stakeholders in an emerging economy. Accounting and public finance educators from a higher education institution, as well as financial advisers as representatives of a profession with a direct interest in tax-related matters, were considered.FindingsAlthough a discipline lens seems to strongly influence the previous authors' view of what tax literacy means, it was possible to identify certain tax literacy competency domains that should be included in a taxpayer education curriculum. These content domains consist first of a knowledge domain which includes disciplinary, interdisciplinary, epistemic and procedural knowledge components. Second, the skills domain should include components of cognitive and meta-cognitive, social and emotional, as well as physical and practice skills. Third, personal and societal attitudes and values represent the third domain. Fourth, transformative competencies such as value creation, taking responsibility and reconciliation attributes are important. Finally, core foundational competencies, such as numeracy and literacy should be in place.Practical implicationsThe draft conceptual framework for tax literacy could serve as the foundation for the further development of a tax literacy measurement instrument, as well as tax education courses.Originality/valueA more holistic conceptual framework for tax literacy, portraying the multidimensional nature of taxation, is presented in contrast to the limited one-dimensional position presented up to now.

Impact of Direct Taxation on Economic Growth: Empirical Evidence Based on Panel Data Regression Analysis at the Level of Eu Countries

Through fiscal policy, the government can influence businesses and individuals in order to regulate their behaviour. The research used panel data from all 27 EU countries covering the period 2008–2020 to investigate the impact of direct taxation on economic growth at the level of two main clusters of countries concerning fiscal efficiency. Therefore, the analysis employed cluster methods to classify the main EU countries in both groups of countries with a high level of fiscal efficiency and those with a rather limited level of fiscal efficiency. The study employs fixed effect models and dynamic GMM methods to investigate the effect of direct taxation components (personal and corporate income taxes) on economic growth. The analysis also considers the informal economy's role in relation to the official economy. The empirical results revealed that corporate income taxes significantly negatively impact economic growth for both clusters of high- and limited fiscal efficiency countries. Additionally, personal income tax was associated with lower economic growth for countries in the limited fiscal efficiency group. Thus, from the perspective of policymakers, lowering direct taxation can increase disposable income, stimulate consumption and economic growth, encourage investment leading to job creation, increase competitiveness, and reduce tax evasion and avoidance, thereby leading to a more efficient tax system.

Uncertainty in firm innovation scheme and impact of green fiscal policy, Economic recovery of Chinese firms in the post-Covid-19 era

With the Covid-19 outbreak, changing prices of natural resource raw materials are driving up industrial costs, limiting output, and jeopardising economic growth. To encourage the revival of the green economy, fiscal and budgetary policies must focus on fostering innovation and growth. This essay investigates the incentives and mechanics of innovation as a recovery strategy by looking at the impact of tiny tax cuts on energy. Using quarterly data from listed Chinese firms from Q1 2019 to Q2 2021, estimate and draw numerous conclusions using a variance-variance technique. To begin with, innovation is a means of regaining and expanding market share, and tax incentives to enhance energy efficiency may be extremely beneficial to a company's inventive efforts. Second, our findings suggest that tax incentives for energy efficiency encourage businesses to invest in innovation by alleviating financial constraints. Finally, corporations may cut financial expenditures and internal cash flow by sponsoring creative activities. The findings have significant policy implications, since they show that successful eco-design fiscal policies might be part of a post-Covid-19 recovery business transformation programme.

Testing for multiple bubbles: historical episodes on the sustainability of public debt in Spain, 1850-2020

PurposeThis paper aims to analyze the dynamics of the Spanish public debt-gross domestic product ratio during the period 1850-2020. Design/methodology/approachThis study uses a recent procedure to test for recurrent explosive behavior (Phillips et al., 2011;Phillips et al., 2015a, 2015b) to identify episodes of explosive public debt dynamics and also the episodes of fiscal adjustments over this long period. FindingsThe identified episodes of explosive behavior of public debt coincided with fiscal stress events, whereas fiscal adjustments and changes in economic policies stabilized public finances after periods of explosive dynamics of public debt. Originality/valueThe longer than usual span of the data should allow the authors to obtain some more robust results than in most of previous analyses of long-run sustainability.

Social spending and chronic unemployment: evidence from OECD countries

PurposeSocial spending is at the forefront of the tools used to repair the damage caused by the global epidemic. However, one of the most critical questions in recent days is as follows: what are the effects of social expenditures in eliminating unemployment? The primary purpose of this article is to provide empirical evidence on the impact of social spending on chronic unemployment in the selected organization for economic co-operation and development (OECD) countries.Design/methodology/approachIn this study, the data of 30 selected OECD countries between 1991 and 2018 have been compiled. First, countries have been divided into four categories according to their spending intensity to determine the effects of social spending on the long-term unemployment rate. Then, the auto-regressive distributed lag (ARDL) approach and the error correction models (ECM) examine the variables' short- and long-term interactions.FindingsThe author found that the change in the share of social expenditures in GDP affects chronic unemployment similarly. This finding is consistent with the results of studies in the literature dealing with the relationship between public sector size and unemployment. However, the research findings are specifically about the effects of social expenditures on chronic unemployment. In this respect, the results reflect that expenditures with passive characteristics have an expansionary effect on long-term unemployment. In addition, the progressive effect of social expenditures on chronic unemployment is increasing in countries with high expenditure intensity. In countries with relatively low spending intensity, the impact of social spending is limited to the short run and is lower.Originality/valueMultiple studies have reported that public policies developed in line with the incentives of active employment and public or private sector investments reduce the unemployment rate by positively affecting the output/employment level. This study, unlike other studies, focuses on the effects of social expenditures on chronic unemployment. It also compares the effects of social spending on the long-term unemployment rate for countries with varying spending intensities. Therefore, this article tests the impact of social expenditures used against a concrete socioeconomic problem in the OECD sample. In this respect, the findings contribute to the literature by addressing the relationship between social spending and chronic unemployment.

The history and future of the tax state: Possibilities for a new fiscal politics beyond neoliberalism

Neoliberalism is marked by fiscal austerity. Yet, in response to the COVID-19 crisis states again, briefly, began to exercise fiscal discretion. We reflect on the potential for a more enduring shift in fiscal politics beyond neoliberalism by placing recent developments in the historical context of the ‘tax state'. We make two claims. First, we argue that different phases of capitalism are reflected in, and can be understood through, changes in fiscal accounting practices that demarcate public and private, and mark turning points for the role of the state within capitalism. Charting the unravelling of the Keynesian welfare state, we propose a fiscal understanding of neoliberalism in which asymmetric applications of capital accounting practices facilitated the financialisation of the state. Second, we argue democratic pressures are giving rise to forms of ‘fiscal hybridity' that reassert accounting symmetries between public and private wealth to potentially create ‘fiscal space'. We examine how the fiscal actions taken by states in response to COVID-19 express hybridity, reflecting contestation over neoliberal policy models that was emerging prior to the pandemic, as fiscal politics shifts the state's focus to its role as creditor, underwriter and investor. © 2023 The Authors

Managing the COVID-19 crisis by fiscal strategies: Lessons from four countries

The COVID-19 Crisis is urgent, global in scale, and has generated a massive impact globally. During the outbreak of the crisis, well-designed fiscal strategies play a critical role in effective crisis management. This article uses an international and comparative perspective to find fiscal strategies used by four countries including China, South Korea, the United States, and Italy to manage the COVID-19 crisis for the period of April 2020 to December 2021. It examines key similarities and differences regarding to these major fiscal strategies adopted by the four countries. This article offers important lessons and summarizes effective practices for other countries that were considering fiscal strategies to manage and deal with the economic and fiscal impacts induced by the COVID-19 crisis.

Economic Role of Government Budget Revision in the Presence of COVID-19

Fiscal policies are one of the most important instruments of government to guide the progress of the country's economic development. They find significant use in cases where the economy is experiencing a period of recession, such as the current one caused by COVID-19. This study aims to assess the multiplier effects that budget revision has on the economy for the case of Albania, and more specifically by referring to the initial and revised budget scenario for the year 2020 which is characterized by significant changes caused by the presence of COVID-19. Referring to the multipliers from the input–output tables (IOT) the total effect that the state budget brings to the economy for a certain year is derived. From this paper, it appears that the budget restructuring that takes place during the year does not take into account the multiplier effect in the economy, but is mostly done for specific purposes related to certain government functions. In this context, it is very important that various options during budget revision are evaluated, concluding with the option that has the highest returns for the economy.