ABSTRACT
Is fiscal federalism associated with economic policy responses and stimulus measures adopted by national and sub-national governments to mitigate the adverse economic effects of the COVID-19 pandemic? In this paper, we provide empirical evidence that it indeed is. Our results indicate that even after controlling for various relevant factors, countries with fiscally federal (decentralised) governments have adopted larger fiscal and macro-financial policy packages (as a percent of GDP). However, there are no significant differences in monetary-policy responses between centralised and decentralised governments. We also show that these results are robust to using different federalism measures, including different sets of control variables and different econometric specifications that include an instrumental variable estimation.
ABSTRACT
2020 was the year when microbiology burst onto the world stage, not just as the science of small living things, but as the prism through which we understood global events. Clinical logic suffered under pressure arising from an urgent need to confirm or exclude severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) infection. This is a generation's Hobbesian moment in which the public concern for safety and security from infection outweighs the pursuit of personal freedom. The strangeness of a world in which a minute particle wields superhuman power has generated its list of unlikely heroes and mendacious villains. As the year comes to an end, there are glimmers of light amid the gloom: the prospect of an effective vaccine, and life after the pandemic.