Discretionary fiscal responses to the COVID-19 pandemic

Abstract

We analyse discretionary fiscal responses to the COVID-19 pandemic. We distinguish policies for three phases of the pandemic: (1) acute overall disruption, (2) initial recovery phase and (3) the longer term. We analyse measures already taken in (1) and consider measures relevant for (2). We distinguish between lump-sum subsidies, such as deferral of tax payments, which may ease financial constraints, and measures which intentionally affect incentives. We also identify factors that are important given the short-term nature of the measures.