Cover IMF Working Papers
International Trade Spillovers from Domestic COVID-19 Lockdowns
Author:
Mr. Shekhar Aiyar
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Mr. Davide Malacrino
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Mr. Adil Mohommad
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Mr. Andrea F Presbitero
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https://orcid.org/0000-0003-4622-941X
Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 120
Language:
English
Publication Date:
17 Jun 2022
DOI:
https://doi.org/10.5089/9798400212178.001
ISBN:
9798400212178
ISSN:
1018-5941
Pages:
48
Keywords:
Trade; Spillover effects; Lockdowns; COVID-19; import demand model; pandemic-response policy; trade partner; goods trade; spillover effect; Imports; Export restrictions; Trade in goods; Exports; Global
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While standard demand factors perform well in predicting historical trade patterns, they fail conspicuously in 2020, when pandemic-specific factors played a key role above and beyond demand. Prediction errors from a multilateral import demand model in 2020 vary systematically with the health preparedness of trade partners, suggesting that pandemic-response policies have international spillovers. Bilateral product-level data covering about 95 percent of global goods trade reveals sizable negative international spillovers to trade from supply disruptions due to domestic lockdowns. These international spillovers accounted for up to 60 percent of the observed decline in trade in the early phase of the pandemic, but their effect was shortlived, concentrated among goods produced in key global value chains, and mitigated by the availability of remote working and the size of the fiscal response to the pandemic.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2022: Issue 120