"Reviving Growth: The Role of Fiscal Policy in Post-Pandemic Economic Recovery – An Applied Macroeconomic Analysis"

Abstract

The COVID-19 pandemic triggered an unprecedented global economic crisis, compelling governments worldwide to implement expansive fiscal policies to stabilize and revive their economies. This paper investigates the effectiveness of fiscal policy interventions—such as stimulus spending, tax reliefs, and public investments—on post-pandemic economic recovery with a focus on GDP growth, employment, and inflation stabilization. By utilizing panel data from 30 countries across the OECD from 2020 to 2023, this study employs econometric modeling to examine the macroeconomic impact of different fiscal measures. The research incorporates both counter-cyclical fiscal policy theories and Keynesian economic models to frame the empirical analysis.

The literature review highlights divergent perspectives on fiscal multipliers in the aftermath of economic crises, emphasizing the contextual variability of policy effectiveness. Methodologically, the study uses fixed effects regression models and dynamic panel estimation (GMM) to address endogeneity and country-specific heterogeneity. Key findings indicate that government consumption and capital expenditure positively correlate with economic output, while tax deferrals had mixed outcomes. Interestingly, countries with strong fiscal frameworks and institutional quality observed more pronounced recovery trends.

This paper contributes to the applied macroeconomic literature by offering comparative insights into policy efficacy and underscores the need for a balanced yet responsive fiscal stance. Recommendations include adopting automatic stabilizers, improving fiscal transparency, and integrating social safety nets into economic policy frameworks. This research is vital for policymakers aiming to build resilient and inclusive economic systems in the post-pandemic era.