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

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 heter...

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Bibliographic Details
Published in:IDEAS Working Paper Series from RePEc 2022-01
Main Authors: Azémar, Céline, Desbordes, Rodolphe, Melindi-Ghidi, Paolo, Jean-Philippe Nicolaï
Format: Article
Language:English
Online Access:Request full text
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Summary: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.