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

Annette Alstadsaeter, Julie Brun Bjorkheim, Wojciech Kopczuk, and Andreas Okland

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.

Citation

Annette Alstadsaeter, Julie Brun Bjorkheim, Wojciech Kopczuk, and Andreas Okland (2020), Norwegian and U.S. Policies Alleviate Business Vulnerability Due to the COVID-19 Shock Equally Well , National Tax Journal, 73:3, pp. 805-828

DOI: dx.doi.org/10.17310/ntj.2020.3.08