Dealing with the COVID-19 pandemic in Slovenia: simulations with a macroeconometric model

Weyerstrass, KlausORCID:; Blueschke, Dmitri; Neck, Reinhard and Verbič, Miroslav (2023) Dealing with the COVID-19 pandemic in Slovenia: simulations with a macroeconometric model. Empirica, 50 (4), pp. 583-881.

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In this paper we analyse the effectiveness of fiscal policies with respect to macroeconomic stabilisation during the COVID-19 pandemic in the small open economy of Slovenia. Using SLOPOL11, an econometric model of the Slovenian economy, we simulate the development of the its economy during the 2020s under alternative assumptions about future pandemic-related shocks. We also determine optimal fiscal policies to combat the effects of the pandemic and to stabilise the economy under two scenarios for the future course of developments under COVID-19. Our simulations show that those public spending measures that entail both demand- and supply-side effects are more effective at stimulating real GDP and increasing employment than pure demand-side measures. Successful stabilisation policies should thus contain a supply-side component in addition to a demand-side component.

Item Type: Article in Academic Journal
Keywords: Macroeconomics, Stabilisation policy, Fiscal policy, Policy optimisation, Tax policy, Public expenditure, Demand management, Supply-side policies, Slovenia, Public debt
Funders: FWF, ARRS
Classification Codes (e.g. JEL): E62, E17, E37
Research Units: Current Research Groups > Energy, Environment, and Sustainable Economic Structures
Date Deposited: 16 Oct 2023 09:58
Last Modified: 18 Jun 2024 07:35
ISSN: 1573-6911

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