{
  "title": "Evaluating the Costs of Government Credit Support Programs during COVID-19: International Evidence",
  "publication": "IMF Working Papers, January 27, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2023/01/27/evaluating-the-costs-of-government-credit-support-programs-during-covid-19-international-528660",
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  "summary": "Advanced economies made available more than 5 trillion USD through government-supported credit guarantee and direct loan programs to provide lifelines to firms in the face of the COVID-19 pandemic.",
  "sections": [
    {
      "heading": "Summary and scope",
      "content": "- Advanced economies made available more than 5 trillion USD through government-supported credit guarantee and direct loan programs during the COVID-19 pandemic.\n- The paper estimates subsidies provided by the largest credit guarantee programs introduced in 2020 in seven advanced economies.\n- Subsidies are estimated on a fair value basis to provide a consistent and comprehensive upfront measure of cost.\n- Authors: Gee Hee Hong, Deborah Lucas.\n- Date: January 27, 2023.\n- Series: IMF Working Paper No. 2023/016; Pages: 62; Volume: 2023; Issue: 016; DOI: https://doi.org/10.5089/9798400231971.001; ISBN: 9798400231971; ISSN: 1018-5941."
    },
    {
      "heading": "Methodology: fair value framework and alternatives",
      "content": "- Estimates use a fair value approach to quantify the subsidy element (cash-equivalent subsidy) of credit support programs.\n- The paper explains the logic for applying a fair value framework in a government context and compares it to alternative approaches."
    },
    {
      "heading": "Key quantitative findings",
      "content": "- For the programs examined, total credit extended totaled 1.7 trillion USD.\n- The subsidy element (cash-equivalent subsidy) is estimated to be 67 percent of loan principal on average (37 percent, excluding the US PPP).\n- Subsidy shares vary widely across programs, ranging from 12 to 100 percent."
    },
    {
      "heading": "Drivers of variation across programs",
      "content": "- Variation in subsidy magnitudes is explained by differences in:\n  - Eligibility criteria.\n  - Loan terms.\n  - Compensation to lenders.\n  - Other program design choices."
    },
    {
      "heading": "Policy-relevant implications",
      "content": "- The fair value estimates provide a consistent, upfront measure of fiscal cost that improves transparency of fiscal consequences from large-scale credit support.\n- Recognizing subsidy costs on a fair value basis can inform fiscal accounting and policy debates over the design and cost of government credit support programs.\n\nInternational Monetary Fund — Evaluating the Costs of Government Credit Support Programs during COVID-19: International Evidence; Gee Hee Hong and Deborah Lucas; IMF Working Papers 2023, 016 (2023).\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2023/01/27/evaluating-the-costs-of-government-credit-support-programs-during-covid-19-international-528660"
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    "Authors: Gee Hee Hong, Deborah Lucas",
    "Published: January 27, 2023",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400231971.001",
    "Advanced economies made available more than 5 trillion USD through government-supported credit guarantee and direct loan programs during the COVID-19 pandemic.",
    "The paper estimates subsidies provided by the largest credit guarantee programs introduced in 2020 in seven advanced economies.",
    "Subsidies are estimated on a fair value basis to provide a consistent and comprehensive upfront measure of cost.",
    "Authors: Gee Hee Hong, Deborah Lucas.",
    "Date: January 27, 2023.",
    "Series: IMF Working Paper No. 2023/016; Pages: 62; Volume: 2023; Issue: 016; DOI: https://doi.org/10.5089/9798400231971.001; ISBN: 9798400231971; ISSN: 1018-5941.",
    "Estimates use a fair value approach to quantify the subsidy element (cash-equivalent subsidy) of credit support programs.",
    "The paper explains the logic for applying a fair value framework in a government context and compares it to alternative approaches.",
    "For the programs examined, total credit extended totaled 1.7 trillion USD.",
    "The subsidy element (cash-equivalent subsidy) is estimated to be 67 percent of loan principal on average (37 percent, excluding the US PPP).",
    "Subsidy shares vary widely across programs, ranging from 12 to 100 percent.",
    "Variation in subsidy magnitudes is explained by differences in:",
    "The fair value estimates provide a consistent, upfront measure of fiscal cost that improves transparency of fiscal consequences from large-scale credit support.",
    "Recognizing subsidy costs on a fair value basis can inform fiscal accounting and policy debates over the design and cost of government credit support programs.",
    "**Working Paper**"
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