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How to Estimate the COVID-19 Damages?

Economic Considerations for State Aid During a Time of Crisis

Victor Ahlqvist, Adina Claici, Stephanie Tizik

DOI https://doi.org/10.21552/estal/2020/2/6

Keywords: damage estimation, counterfactual analysis, COVID-19


The unprecedented volume of State aid applications during the COVID-19 crisis presents new economic challenges and policy considerations related to the need for aid and the extent of the damages suffered by undertakings. In light of the current situation, this article presents the foundation for State aid during the outbreak of COVID-19, discusses the methodology for determining the damages using a counterfactual analysis and addresses some of the important factors that policy makers must balance in order to ensure that firms receive the necessary support while minimising the distortions on competition.
Keywords: damage estimation, counterfactual analysis, COVID-19

Victor Ahlqvist, Economist at Copenhagen Economics. Dr Adina Claici, Director at Copenhagen Economics. Stephanie Tizik, Analyst at Copenhagen Economics. For correspondence: <mailto:vah@copenhageneconomics.com>. Thank you to our colleagues Dr Claus Kastberg Nielsen and Dr Karl Lundvall for providing helpful comments and quality assurance. All websites accessed 6 May 2020.

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