Unité mixte de recherche 7235

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

Journal of Public Economic Theory

Economie publique et choix collectifs

24 - 1016 - 1038

2022

Céline Azémar, Rodolphe Desbordes, Paolo Melindi-Ghidi, Jean-Philippe Nicolaï

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.

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