Front Matter

Copyright Page

© 2022 International Monetary Fund


IMF Working Paper

Asia and Pacific Department

Fiscal Multipliers During Pandemics1

Prepared by Tidiane Kinda, Andras Lengyel and Kaustubh Chahande

Authorized for distribution by Lam in Leigh

July 2022

IMF Working Papers describe research in progress by the author(s)and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board,or IMF management.


Many countries have deployed substantial fiscal packages to cushion the economic fallout from the COVID-19 pandemic. A historical look at past pandemics and epidemics highlights concomitant public sector support in response to health crises. This paper assesses how fiscal multipliers could vary during health crises, particularly how factors such as social distancing and uncertainty could lower contemporaneous (T) multipliers and increase near-term (T+1 and T+2) multipliers as economies re-open, including due to pent-up demand. Based on Jorda’s (2005) local projection methodology, the paper shows that cumulative fiscal multipliers one year after a health crisis is about twice larger than during normal times, particularly in advanced economies. These results suggest that large-scale fiscal support deployed at the onset of the COVID-19 pandemic could have larger than usual lingering impacts on economic activity, which need to be accounted for when calibrating policies.

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Title Page


Fiscal Multipliers During Pandemics

Prepared by Tidiane Kinda, Andras Lengyel and Kaustubh Chahande


  • Introduction

  • Health Crises and Economic Output: Potential Transmission Channels

    • Heightened Uncertainty

    • Supply Bottlenecks

    • Suppressed Demand

  • Data

  • Empirical Strategy

  • Main Results

  • Transmission Channels

  • Robustness and Additional Exercises

  • Conclusion

  • References

  • Appendix


  • 1. Cumulative Fiscal Multipliers – Total Expenditures, All Countries

  • 2. Cumulative Fiscal Multipliers – Public Consumption, All Countries

  • 3. Cumulative Multipliers- Fixed Capital Formation, All Countries

  • 4. Cumulative Fiscal Multipliers – Total Expenditures, Advanced Economies

  • 5. Cumulative Fiscal Multipliers – Total Expenditures, Developing Economies

  • 6. Including Proxies to Capture Transmission Channels: Total Expenditures, Public Consumption and Public Investment, All Countries

  • A1. Cumulative Multipliers – Public Consumption, Advanced Countries

  • A2. Cumulative Multipliers – Fixed Capital Formation, Advanced Countries

  • A3. Cumulative Multipliers – Public Consumption, Non-advanced Countries

  • A4. Cumulative Multipliers- Fixed Capital Formation, Non-advanced Countries

  • A5. Multipliers with the Forecast Error Identification


  • 1. P-values of the Chi-squared Test of the Difference between Cumulative Fiscal Multipliers in Pandemic and Non-Pandemic States

  • 2. P-Value of the Chi-Squared Test of the Difference between the Cumulative Multipliers in the Two States, after Adding Proxies for Transmission Channels

  • A1. Summary Statistics

  • A2. Mean Values, Standard Deviations, and P-Value T-Tests of Difference in Mean of Transmission Channel Proxies in Pandemic and Non-pandemic States

  • A3. Transmission Channels Regressions, Total Expenditure, All Countries

  • A4. The Role of Fiscal Position and Credibility


The authors would like to thank Nada Choueiri, Juan Sebastian Corrales, Davide Furceri, Massimo Giuliodori, Gee Hee Hong, Nikhil Patel, Jiae Yoo, and participants in the APD Departmental Seminar for helpful comments as well as Justin Flinner for excellent production assistance.

Fiscal Multipliers During Pandemics
Author: Mr. Tidiane Kinda, Andras Lengyel, and Kaustubh Chahande