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Estimating SME Failures in Real Time: An Application to the COVID-19 Crisis / Pierre-Olivier Gourinchas, Ṣebnem Kalemli-Özcan, Veronika Penciakova, Nick Sander.
- Format:
- Book
- Author/Creator:
- Gourinchas, Pierre-Olivier.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w27877.
- NBER working paper series no. w27877
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2020.
- Summary:
- We develop a flexible framework for tracking business failures during economic downturns. Our framework combines firm-level data with a model of cost-minimization where firms react to a rich set of shocks and fail if illiquid. After verifying that our methodology approximates past official failure rates, we apply it to the COVID-19 crisis in 11 countries. Absent government support, SME failures would have increased by 6.15 percentage points, representing 3.15 percent of employment. We find little threat to financial stability. Commonly implemented COVID-19 policies saved firms but were costly because funds were directed to firms that could survive without support.
- Notes:
- Print version record
- September 2020.
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