Will Covid-19 expose the ghost firms?

That is the topic of my latest Bloomberg column, here is one excerpt:

    Demand for in-restaurant dining is likely to fall as well, though estimates vary. Since the average small business carries less than a month’s worth of liquid reserves, and the wait for a vaccine is likely to be at least a year, many restaurants will simply be unable to survive the shrinking of the market.

    I call these places ghost restaurants because they are still walking around, so to speak, visible to us and listed on Yelp, but not really alive and without much of a future.

    In a few months’ time, a significant number of these ghost enterprises will be gone. My drive around Northern Virginia, rather than being rich with culinary choice, will soon become fairly desolate — and the overall economic landscape will indeed be much emptier.

What else in our current capital structure might qualify as “ghost”?

Originally posted on Marginal Revolution – click to see comments and suggestions.

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