Norwegian and U.S. Policies Alleviate Business Vulnerability Due to the COVID-19 Shock Equally Well

Annette Alstadsæter, Julie Brun Bjørkheim, Wojciech Kopczuk and Andreas Økland

National Tax Journal, 2020, vol. 73, issue 3, 805-828

Abstract: We use Norwegian administrative data and applications for emergency government support to simulate the 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, and solvency by more than a half.

Date: 2020
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