Growth Forecasts vs. Realizations: The Role of Stimulus and Stringency Measures during the Pandemic

Gudum, Melis (2021): Growth Forecasts vs. Realizations: The Role of Stimulus and Stringency Measures during the Pandemic.

Abstract

This paper investigates the relationship between different institutions’ GDP growth forecasts for the year 2020 and the actual realized growth levels in the same year. To this end, we use data from the IMF and World Bank’s publications and show that on average, an economy has overperformed its expected growth rate when i) the sizes of announced fiscal and macro-financial stimulus measures are larger, ii) The extent of the government stringency measures is smaller, iii) the pre-pandemic level of GDP per capita is larger. Our results can be crucial for policy-makers when they design growth-oriented economic policies.

• Item Type: MPRA Paper
• Language: English
• Keywords: COVID-19 pandemic, fiscal stimulus, macro-financial measures, economic policy
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E60 - General; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General

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