Fiscal stimulus packages to COVID-19: The role of informality.
J Int Dev
; 34(4): 861-879, 2022 May.
Article
in English
| MEDLINE | ID: covidwho-1649309
ABSTRACT
In this paper, we use a novel cross-country dataset to investigate the relationship between the prevalence of the shadow economy and fiscal policy responses to the economic crisis induced by the pandemic. The finding is that countries with a relatively larger shadow economy before the pandemic have adopted a smaller fiscal policy package. The results are robust to different econometric specifications, including an instrumental variable estimation. This reinforces the wider literature that countries (especially those with larger shadow economies) generally follow a procyclical policy as opposed to the optimal and countercyclical one.
Full text:
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Collection:
International databases
Database:
MEDLINE
Type of study:
Observational study
/
Randomized controlled trials
Language:
English
Journal:
J Int Dev
Year:
2022
Document Type:
Article
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