THE EFFECT OF THE COVID-19 PANDEMIC ON AGGREGATE CORPORATE PROFITS IN AMERICA

Author

Michael Smith

Date of Award

2022

Document Type

Thesis

Degree Name

Bachelors

Department

Social Sciences

First Advisor

Khemraj, Tarron

Area of Concentration

Quantitative Economics with Finance

Abstract

The purpose of this thesis is to provide an empirical examination of the effect of the COVID-19 pandemic on aggregate corporate profits in the United States, as well as to elucidate avenues for future research related to the topic. The null hypothesis is that the COVID-19 pandemic did not have a significant effect on aggregate corporate profits. Aggregate corporate profits are considered in an autoregression distributed lag model and estimated using Ordinary Least Squares. The initial determinants of the model include private consumer expenditure, private investment, government expenditure, net exports, net worth of businesses, research & development expenditures, and the federal funds rate. Final results show that aggregate corporate profits are not significantly impacted by the COVID-19 pandemic, but are affected by consumption, investment, government expenditures, and research & development expenditures.

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