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

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  • Annette Alstadsæter
  • Julie Brun Bjørkheim
  • Wojciech Kopczuk
  • Andreas Økland

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.

Suggested Citation

  • Annette Alstadsæter & Julie Brun Bjørkheim & Wojciech Kopczuk & Andreas Økland, 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.
  • Handle: RePEc:ntj:journl:v:73:y:2020:i:3:p:805-828
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    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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