“COVID-19, Fiscal Stimulus, and Credit Ratings” with Anuragh Balajee and Shekhar Tomar. Published at COVID Economics, Real Time Vetted Papers Series by CEPR, Issue 11, April 2020. Abstract: The COVID-19 pandemic has rattled the global economy and has required governments to undertake massive fiscal stimulus to prevent the economic fallout of social distancing policies. In this paper, we compare the fiscal response of governments from around the world and its main determinants. We find sovereign credit ratings as one of the most critical factors determining their choice. First, the countries with one level worse rating announced 0.3 percentage points lower fiscal stimulus (as a percentage of their GDP). Second, these countries also delayed their fiscal stimulus by an average of 1.7 days. We identify 22 most vulnerable countries, based on their rating and stringency, and find that a stimulus equal to 1 percent of their GDP adds up to USD 87 billion. In order to fight the pandemic, lo...

“COVID-19, Fiscal Stimulus, and Credit Ratings” with Anuragh Balajee and Shekhar Tomar. Published at COVID Economics, Real Time Vetted Papers Series by CEPR, Issue 11, April 2020.

Abstract: The COVID-19 pandemic has rattled the global economy and has required governments to undertake massive fiscal stimulus to prevent the economic fallout of social distancing policies. In this paper, we compare the fiscal response of governments from around the world and its main determinants. We find sovereign credit ratings as one of the most critical factors determining their choice. First, the countries with one level worse rating announced 0.3 percentage points lower fiscal stimulus (as a percentage of their GDP). Second, these countries also delayed their fiscal stimulus by an average of 1.7 days. We identify 22 most vulnerable countries, based on their rating and stringency, and find that a stimulus equal to 1 percent of their GDP adds up to USD 87 billion. In order to fight the pandemic, long term loans from multilateral institutions can help these stimulus starved economies.

“Fiscal Situation of India in the Time of COVID-19” with Anuragh Balajee and Shekhar Tomar. Published at Economics and Political Weekly, Volume LVII, Num bers 26 and 27, 2022.

Abstract: India announced a fiscal package worth INR 1.7 trillion to fight the COVID 19 pandemic, but there were arguments for more spending. Using data from a cross section of countries, this paper estimates the relationship between fiscal spending and the spread of COVID-19, economic stringency, and macroeconomic factors. It argues that subsidy rationalisation is the way to fund the increased expenditure on health and direct transfers while maintaining fiscal discipline.