Comparative analysis of the economic policy response to COVID-19 in the EU-27 and Republic of Serbia

Nikolić, Ivan and Filipović, Sanja (2021) Comparative analysis of the economic policy response to COVID-19 in the EU-27 and Republic of Serbia. Ekonomika preduzeća, 69 (7-8). pp. 460-475. ISSN 0353-443X eISSN 2406-1239

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Abstract

In response to the COVID-19 crisis, a wide range of short-term fiscal, monetary and macroprudential measures have been implemented. The aim of this research is to compare the effects of the package of economic measures implemented in the EU-27 countries and the Republic of Serbia in 2020 according to several criteria, starting from factors which had the impact on the amount of economic aid package to assessing short-term effects on economic activity, labour market and public debt. The results of the research showed that the financial value of the economic aid package in 2020 reflects, above all, the economic capacity and relative wealth of the country, rather than the depth of the crisis that the countries faced. A positive interdependence was found between the financial amount of the economic measures package and the amount of public debt as a percentage of GDP, while a negative interdependence was found between the change in unemployment rate and the volume of economic package aid as a share of GDP. Based on the available data, it is still not possible to determine the positive statistical impact of the economic package aid on economic growth. Such findings are also expected because the measures were primarily tailored to preserve the liquidity of the economy and employment. Besides, a certain period of time is needed for the measures to take effect, which may explain the discrepancy between the amount of aid and the depth of economic activity in 2020. The data showed that the Serbian economy, unlike the Eurozone, recorded moderate debt growth and adequate capitalized banking sector is resistant to credit risk growth.

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