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Winners and losers of the COVID‐19 pandemic: An excess profits tax proposal

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  • Céline Azémar
  • Rodolphe Desbordes
  • Paolo Melindi‐Ghidi
  • Jean‐Philippe Nicolaï

Abstract

In this paper, we study the gains and losses incurred during the COVID‐19 pandemic. We distinguish between the effects of the pandemic and those of the health measures implemented to reduce the death toll, notably “the lockdown.” Our theoretical model is focused on within‐sector firm heterogeneity and involves imperfect competition in a partial equilibrium setting. A comparison between the gains and losses triggered by both the pandemic and the lockdown indicates that an excess profits tax imposed on the “winners” could partly compensate the “losers” of the same sector.

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  • Céline Azémar & Rodolphe Desbordes & Paolo Melindi‐Ghidi & Jean‐Philippe Nicolaï, 2022. "Winners and losers of the COVID‐19 pandemic: An excess profits tax proposal," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(5), pages 1016-1038, October.
  • Handle: RePEc:bla:jpbect:v:24:y:2022:i:5:p:1016-1038
    DOI: 10.1111/jpet.12589
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    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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