The second wave of the Covid-19 pandemic has interrupted the recovery in Germany. GDP is set to decline in the first quarter of this year, after stagnating in the previous quarter. However, with the vaccination campaign progressing, the economic burden of the pandemic will ease and the recovery...

In this paper, I examine the effects of a countercyclical fiscal policy that gave firms additional tax refunds -- additional liquidity -- at the end of the past two recessions. I take advantage of a discontinuity in the slope of the tax refund formula to estimate the policy's impact. I find that...