Firm dynamics in the COVID-19 crisis. Analyze the impact of the
COVID-19 crisis from a firm dynamics perspective. Assume that the
productivity of all firms is the product of an economy wide
parameter z times an idiosyncratic firm-level productivity that
varies by firm and over time as an AR(1) process. What does the
basic model predict regarding entry, exit, employment, wages? How
does the policy of loans converted to grants to keep employment at
the firm level affect the equilibrium?