Global supply-chain effects of COVID-19 control measures

Abstract

Countries have sought to stop the spread of coronavirus disease 2019 (COVID-19) by severely restricting travel and in-person commercial activities. Here, we analyse the supply-chain effects of a set of idealized lockdown scenarios, using the latest global trade modelling framework. We find that supply-chain losses that are related to initial COVID-19 lockdowns are largely dependent on the number of countries imposing restrictions and that losses are more sensitive to the duration of a lockdown than its strictness. However, a longer containment that can eradicate the disease imposes a smaller loss than shorter ones. Earlier, stricter and shorter lockdowns can minimize overall losses. A 'go-slow' approach to lifting restrictions may reduce overall damages if it avoids the need for further lockdowns. Regardless of the strategy, the complexity of global supply chains will magnify losses beyond the direct effects of COVID-19. Thus, pandemic control is a public good that requires collective efforts and support to lower-capacity countries.

Insights from early COVID-19 responses about promoting sustainable action

“…For instance, during early COVID-19 outbreaks, some countries enforced strict lockdowns (for example, China, Italy, New Zealand, Philippines and South Africa). Many schools and businesses were shut, and many individuals engaged in strict hygiene practices, social distancing and self-quarantining, which all involve substantial personal and social costs 4,5 . These responses are even more striking given that most individuals feel that risks associated with contracting the virus are greater for others than for themselves 6,7 .…”

COVID-19 underscores the urgency of just transition alongside green recovery

“…Sensitivity factors for individual sectors are set to differentiate sectors 26 . Google Community Mobility Report 29 also reports transportation to other destinations (retail store, grocery and pharmacy, parks, transportation hubs, and residential areas), which is used in this research to calibrate the demand data during the pandemic.…”

Economic Resilience: Spillovers, Courts, and Vertical Integration

“…1 A stream of papers in macroeconomics estimate that localized shocks transmit through input-output linkages and explain between 50 and 83 percent of aggregate fluctuations (Foerster et al, 2011;Acemoglu et al, 2012;di Giovanni et al, 2014;Atalay, 2017;Carvalho et al, 2016). 2 The recent outbreak of Covid-19, which has shaken both global and domestic supply chains, has put supply chain resilience at the forefront for policymakers, academics, and practitioners alike (European Parliament, 2020;Garnett et al, 2020;Guan et al, 2020;Kearney Consulting, 2020). 3 There is growing urgency in the need to understand how supply chain disruptions can be alleviated in order to minimize further economic distress.…”