South Korea undertook a number of important fiscal steps in 2020-21 to fight the COVID-19 pandemic. Key policies it adopted were common to most advanced economies, including transfers to support households, firms, and workers and increased resources for public health measures such as testing, tracing, quarantines, and vaccine rollouts. In terms of the increase in overall pandemic spending, Korea did as much as the typical advanced economy. Yet its fiscal deficit was lower than those of other advanced economies for reasons unrelated to the magnitude of its fiscal response. The authors find…
