Did Fiscal Measures Help Combat the Macroeconomic Impact of COVID-19?

The outburst of COVID-19 pandemic led to wide ranging social and economic problems to surface around the world since the beginning of 2020. A recently released data by the IMF report fiscal measures that countries adopted to cope with the crisis. Exploiting these novel data, we investigate the impact of fiscal measures on macroeconomic outcomes in the year of the outbreak. We find that the fiscal policy was only effective in case of unemployment, which was negatively associated with liquidity support. While fiscal support did not have a significant association with inflation or current account, these outcomes were significantly lower the higher was governance.