The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown

Mattia Guerini, Lionel Nesta, Xavier Ragot and Stefano Schiavo

No 2022-24, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: This paper evaluates the risk of zombification of the French economy during the sanitary crisis, as a result of the unconditional financial support provided to firms by public authorities. We develop a simple theoretical framework based on a partialequilibrium model to simulate the liquidity and solvency stress faced by a large panel of French firms and assess the impact of government support measures. Simulation results suggest that those policies helped healthy but illiquid firms to withstand the shock caused by the pandemic. Moreover, the analysis finds no evidence of a “zombification effect†, as government support has not disproportionately benefited less productive companies.

Keywords: Covid-19; zombie firms; job-retention schemes; microsimulation; policy evaluation (search for similar items in EconPapers)
JEL-codes: G33 H12 H32 J38 L20 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2022-07
New Economics Papers: this item is included in nep-sbm
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http://195.220.190.85/GREDEG-WP-2022-24.pdf First version (application/pdf)

Related works:
Journal Article: Zombification of the economy? Assessing the effectiveness of French government support during COVID-19 lockdown (2024)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support during Covid-19 Lockdown (2024)
Working Paper: Zombification of the economy? Assessing the effectiveness of French government support during COVID-19 lockdown (2024)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support during Covid-19 Lockdown (2024)
Working Paper: Zombification of the economy? Assessing the effectiveness of French government support during COVID-19 lockdown (2024)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support during Covid-19 Lockdown (2022)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown (2022)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown (2022)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown (2022)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown (2022)
Working Paper: The Zombification of the Economy? Assessing the Effectiveness of French Government Support During COVID-19 Lockdown (2022)
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