The impact of COVID-19 on corporate fragility in the United Kingdom: Insights from a new calibrated firm-level Corporate Sector Agent-Based (CAB) Model

Covid-19 and the associated restrictions on interaction have led to an unprecedented shock activity firms’ balance sheets. To assess impact, this paper applies a new large-scale firm-level simulation model calibrated United Kingdom (UK). The specifically examines Coronavirus Job Retention Scheme (CJRS) furlough program credit guarantee. Corporate Sector Agent-Based (CAB) Model (Hillman, Barnes, Wharf MacDonald, 2021) takes into account: heterogeneity across firms; interactions between firms realistic customer-supplier network; rule-of-thumb behaviour by bankruptcy constraints. amplifies effect of shocks generates substantial persistence overshooting, as well displaying number non-linearities. CAB uses data-rich approach based ORBIS data OECD Input-Output tables. Simulations in are observed path UK output 2020.