This thesis was written by Jakob Eberl while having been a research assistant at the Center for Economic Studies (CES) at the University of Munich. It was completed in December 2015 and accepted as a doctoral thesis by the Department of Economics at the University of Munich in May 2016. The...

Long shunned as slow and ill timed, the response to the Covid-19 pandemic initiated a reassessment of fiscal policy as stabilisation tool. At the same time, there is ample evidence that major economic downturns produce lasting effects on real GDP in spite of active fiscal policy interventions....