Trade and the COVID-19 Pandemic: Lessons from French Firms

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.

COVID-19 Impact on Trade Flow as the World Adapts to the Pandemic

“…This explains that COVID-19 pandemic as an event does not have an impact on global trade if we consider the pre-COVID-19 and post-COVID-19 trades as of 2022. This also explains the rebound in trade as presented by Brussevich et al (2022). We also analyzed the impact of the Russia-Ukraine War (equations 7,8 and 9) and found that trade flow, Export, and Import are positive despite the war.…”

“…Brussevich et al (2022) suggested that the initial collapse in trade flows and the subsequent recovery after the initial phase of Covid-19 in 2020 was demand-driven. Citing WTO, Brussevich et al (2022) identified several factors contributing to the rebound-(i) proactive fiscal and monetary policies combined with trade policy restraint in protecting supply chains (ii) technological innovation which facilitated remote working (iii) shift in consumer demand to online based businesses or ecommerce. Jiang et al (2022) studied the post-Covid economic recovery of China by constructing a macroeconomic resilience index.…”

Trade in the Time of COVID-19: An Empirical Analysis Based on Italian Data

“…where the subscript i indicates the firm, p indicates the product at the 6-digit level of the CN classification, c is the country of origin or destination and t is time (year & month). Following Brussevich et al (2022), since a non-negligible part of the adjustment took place through the extensive and sub-extensive margins, the dependent variable is the monthly year-on-year mid-point growth rate, defined as follows:…”

“…To proxy the severity of the pandemic shock, I employ the data of the Oxford Covid-19 Government Response Tracker (OxCGRT), which is described in Hale et al (2021) and includes a large number of Covid-19 related indicators for nearly all countries in the world. Following Brussevich, Papageorgiou, and Wibaux (2022), I focus in particular on two indices: the (monthly average) stringency index, which is a synthetic measure of the stringency of lockdowns implemented by governments at each point in time, and the monthly death rate of Covid-19 by country.…”

“…The existing paper which is closest to mine is Brussevich, Papageorgiou and Wibaux (2022), where the French customs data are employed to decompose the aggregate trade adjustment into the intensive, extensive and sub-extensive margins and to assess the impact of Covid-19 on the mid-point growth rates of imports and exports, which is similar to what I present in sections 3.3 and 3.4. Nevertheless, my contribution departs from their analysis in several different ways, as I study the differential impact of the pandemic across three different waves of Covid-19 in 2020 and 2021, I analyze the impact of domestic lockdowns on trade and investigate the potential permanent effects of Covid-19 on the set of varieties that Italian firms trade.…”