In the new special issue of Public Sector Economics Guest Editors Milan Deskar-Škrbić and Darjan Milutinović selected articles that provide analytical background for discussions on the economic and fiscal effects of the pandemic recession. Dubravko Mihaljek in the article Interactions between fiscal and monetary policies: a brief history of a long relationship compares and contrasts the policy mix in major economies during the pandemic recession with selected episodes from the past and its aftermath. Vladimir Arčabić and Frane Banić in the article Characteristics of fiscal policy in Croatia: does it depend on the phase of the business cycle? analyse fiscal policy cyclicality and debt sustainability. Lovorka Grgurić, Ozana Nadoveza Jelić and Nina Pavić in the article The interplay of supply and demand shocks: measuring potential output in the COVID-19 pandemic show that the pandemic affected both the supply and the demand sides of the Croatian economy and conclude that in 2020 there was a significant decline in potential GDP accompanied by a record large negative output gap. Hrvoje Šimović, Maja Mihelja Žaja and Marko Primorac in the article Fiscal (un)sustainability of the Croatian healthcare system: additional impact of the COVID-19 crisis note that the pandemic deepened and exacerbated the already existing financing problems of the Croatian healthcare system, but they also see it as a chance to start solving the problems by implementing reforms on both the revenue and the expenditure sides of the healthcare system. Gonzalo Gómez Bengoechea in the article The impact of the COVID-19 crisis on income distribution under different protection schemes: the case of Spain uses household survey data to estimate the costs of lockdowns under three different protection schemes for low-income earners. Teboho Jeremiah Mosikari and Joel Hinaunye Eita in the article Asymmetric effect of government debt on GDP growth: evidence from Namibia show that an increase in government debt is associated with slower GDP growth and vice versa – a decrease in debt helps raise GDP growth.