International Trade Spillovers from Domestic COVID-19 Lockdowns

Abstract

IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Climate Policies as a Catalyst for Green FDI

“…Despite these shortcomings, Aiyar, Malacrino and Presbitero (2023) show that there is a strong correlation between country-level gross FDI flows and aggregate greenfield FDI values stemming from fDi markets. Moreover, the number of bilateral (country-pair) projects, which is verifiable information, and investment values are highly correlated, providing further validation to the investment data.…”

Geo-Economic Fragmentation and the Future of Multilateralism

“…History shows that an IMS designed for a particular configuration of the world economy could become brittle in the face of structural shifts 9 Among the factors that rendered the Covid-19 pandemic more painful than needed on both the health and economic fronts were trade restrictions on medical goods and limited provision and distribution of vaccines in some instances (OECD 2020(OECD , 2021Espitia et al 2020). Uncoordinated lockdowns-while often necessary on medical grounds-created negative international spillovers that accounted for about 60 percent of the observed decline in trade (Aiyar et al 2022). 10 The rules and conventions govern monetary and exchange rate arrangements, cross-border payments for current transactions, capital flows and related management measures, international reserves, and the various layers of the GFSN.…”

Divided We Fall: Differential Exposure to Geopolitical Fragmentation in Trade

“…Note that equations ( 21) and ( 22) imply that conditions (3) and ( 4) are satisfied in the model and, therefore, sectoral trade flows in each period can be represented by a gravity equation as in (1) with D sn ′ t ≡ p snt Q snt and…”

“…The Covid-19 pandemic triggered concerns about the resilience of global supply chains, including to geopolitical risks. 1 Most recently, Russia's war on Ukraine prompted the imposition of heavy bilateral trade sanctions between the E.U. and Russia, and calls by senior U.S. and E.U.…”