Working Paper: NBER ID: w27637
Authors: Annette Alstadster; Julie Brun Bjrkheim; Wojciech Kopczuk; Andreas Kland
Abstract: We use Norwegian administrative data and applications for emergency government support to simulate magnitude and distribution of business revenue shock due to the Covid-19 pandemic. We rely on it to analyze the impact of business support policies available in Norway and the United States by comparing simulated results from the various policies on a common data set. We find that policies supporting payroll and fixed costs that were available in both countries have a similar impact of reducing firms' economic distress, by cutting the negative effect of the crisis on profitability, liquidity, debt, and solvency by over a half.
Keywords: COVID-19; business support policies; Norwegian economy; US economy; financial distress
JEL Codes: H25
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| policies supporting payroll and fixed costs (E64) | reduce firms' economic distress (G33) |
| policies supporting payroll and fixed costs (E64) | cut the negative effects of the crisis on profitability (G01) |
| policies supporting payroll and fixed costs (E64) | cut the negative effects of the crisis on liquidity (F65) |
| policies supporting payroll and fixed costs (E64) | cut the negative effects of the crisis on debt (H12) |
| policies supporting payroll and fixed costs (E64) | cut the negative effects of the crisis on solvency (G33) |