Norwegian and US Policies Alleviate Business Vulnerability Due to the Covid-19 Shock Equally Well
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.
We thank the editor, Bill Gentry, for extremely helpful comments and suggestions. Financial support from the Research Council of Norway, grants number 283322 and 316475, is gratefully acknowledged. We thank Tiril Eid Barland for research assistance and Statistics Norway for rapid data delivery. Any remaining errors and inconsistencies are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Annette AlstadsÃ¦ter & Julie Brun BjÃ¸rkheim & Wojciech Kopczuk & Andreas Ã˜kland, 2020. "Norwegian and U.S. Policies Alleviate Business Vulnerability Due to the COVID-19 Shock Equally Well," National Tax Journal, National Tax Association;National Tax Journal, vol. 73(3), pages 805-828, September. citation courtesy of