US and EU Fiscal Policy Responses to COVID-19: Too Little, Too Late, or Too Much?

The research paper compares and contrast the fiscal policy responses to the COVID Crisis in the United States and the European Union in combating the shortest but deepest economic recession in living memory. Fiscal policy has played a key role during an environment of limitations of monetary policy due to the effective lower bound on interest rates. An examination of the appropriateness and timeliness of the alternative fiscal policy paths will highlight how targeting of aid to limit unemployment and sustain needed consumption expenditures were differentially designed. The paper concludes with a comparative look at the recovery paths of output and employment across the United States and the Member States of the European Union.