What do you mean by ‘hibernating’ firms? Is this one way to ‘freeze’ the economy?
Assuming that the COVID-19 shock will eventually pass, some have argued for ‘freezing’ an economy so that it can resume later. But is entirely bringing an economy to a standstill possible?
We propose ‘hibernating’ as a way of avoiding the economic costs of breaking firms’ valuable relationships with their stakeholders and going into bankruptcy. Firms have relationships with an array of key stakeholders, such as workers, suppliers, customers, and creditors, that have been painstakingly built up and maintained over time. Avoiding the destruction of these […]
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