The global COVID-19 pandemic caused a severe blow to the world economy, bringing the biggest economic downturn since the Great Depression. This economic downturn was accompanied by various controversies regarding the role of the state in the economy. To withstand these shocks, most of the states...

In this paper we investigate the possible effects of fiscal tightening in Hungary from two perspectives. First, simulations in an estimated neo-Keynesian model are used to characterise the effects of different scenarios for fiscal consolidations. We show that the composition of fiscal shocks is...