AN ANALYSIS OF THE EXTENT OF ECONOMIC MEASURES DURING THE COVID-19 PANDEMIC

Abstract

The aim of this paper is to assess the extent of economic measures for 168 countries with a more detailed focus on Sweden, Singapore and the Czech Republic and then to recommend a possible future course of action to governments. We use a database of six indicators characterizing: i) fiscal measures, ii) interest rate changes, iii) macro-financial measures, iv) other monetary policy measures, v) exchange rate measures, and vi) other exchange rate measures. Next, we use our own modification of the economic stimulus index constructed by principal component analysis. Sweden introduced the most extensive economic measures, while the economic measures of the governments of Singapore and the Czech Republic were at about half level. We see the timeliness, adequacy, breadth and consistency of government action as a most economically efficient approach. We recommend the adoption of fundamental reforms, e.g. a higher share of indirect taxes or sustainable financing of pension and health care systems, where increasing the level of taxation in the form of selective consumption taxes can be seen as effective. Another key recommendation is the importance of investing in digital infrastructure to enable, for example, greater flexibility in the labor market or greater efficiency in public administration.