Introduction to the special section on the public finance – growth nexus

Abstract

The deep economic contraction triggered by COVID-19 results in large budget deficits and ballooning public debts, which could pose serious fiscal challenges to several countries. COVID-related challenges amplify the difficulty of long-standing public finance problems, such as the sustainability of European welfare systems in the midst of ageing populations and the difficulties of taxing in a globalised world, where rich people and multinational companies hide their income and wealth through complex financial structures involving several countries. It is therefore even more important that scarce public resources are collected and spent well. (...)