This paper evaluates the temporary VAT reduction invoked by the German government over the third and fourth quarter of 2020 as part of the COVID-19 stimulus package. There is considerable controversy. Critics argue that VAT reductions are ineffective in the presence of lockdown measures in place...

We investigate whether the macroeconomic effects of government spending shocks vary with the level of uncertainty. Using postwar US data and a Self-Exciting Interacted VAR (SEIVAR) model, we find that fiscal spending has positive output effects in tranquil times but is contractionary during...

We investigate whether US government spending multipliers are higher during periods of heightened uncertainty or economic slack as opposed to normal times. Using quarterly historical data and local projections, we estimate a cumulative one-year multiplier of 2 during uncertain periods. In...

In response to the spillovers of the COVID-19 pandemic on the economy, many governments paid cash transfers to households. We examine the effect of this fiscal policy instrument on households in two emerging economies, Vietnam and Thailand. Our analysis is based representative population surveys...

The paper uses a panel of more than 1m German firms over 2010-2016, to provide the first firm-bank level evidence of local crowding out for a developed economy characterized by low interest rates and fiscal austerity. Our mechanism relies on two structural features of Germany's banking...