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

ABSTRACT

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.)