Insolvency and debt overhang following the COVID-19 outbreak: Assessment of risks and policy responses
Lilas Demmou, Sara Calligaris, Guido Franco, Dennis Dlugosch, Mge Adalet McGowan, Sahra Sakha 22 January 2021
A swift response by policymakers across OECD countries has helped businesses to bridge the short-term liquidity shortfalls due to the economic shock following the COVID-19 outbreak, avoiding immediate and widespread insolvency crises (Demmou et al. 2020, Demmou et al. 2021a). However, many countries have now entered a second wave of the health crisis, magnifying even further the economic shock of an unprecedented scale (Boot et al. 2020, Cochrane 2020). This situation, which forces firms to deplete even further their cash and equ…
Read the full article at: https://voxeu.org/article/insolvency-and-debt-overhang-following-covid-19-outbreak