Spatial transmission of the economic impacts of COVID-19 through international trade

While most of the attention to COVID-19 is being focused on the physical transmission of the virus across country borders, there is also an analogous spatial transmission of economic impacts through international trade and global supply chains. This paper presents an analysis of the extent to which...

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Bibliographic Details
Published in:Letters in spatial and resource sciences 2021-08, Vol.14 (2), p.169-196
Main Authors: Rose, Adam, Walmsley, Terrie, Wei, Dan
Format: Article
Language:English
Subjects:
Agricultural Economics
Coronaviruses
COVID-19
Demography
Disease transmission
Economic impact
Economic shock
Economics
Economics and Finance
Environmental Economics
Exports
Geographical Information Systems/Cartography
Global economy
Interconnections
International trade
Landscape/Regional and Urban Planning
Original Paper
Pandemics
Regional/Spatial Science
Supply
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Summary:While most of the attention to COVID-19 is being focused on the physical transmission of the virus across country borders, there is also an analogous spatial transmission of economic impacts through international trade and global supply chains. This paper presents an analysis of the extent to which the economic shocks of mandatory closures to mitigate the pandemic ripple through the world economy. We utilize a state-of-the-art computable general equilibrium (CGE) model to analyze these interconnections through international trade. We compare estimates of the impacts on US GDP in isolation and then examine the impacts taking into account US trade with China and the rest of the world (ROW). Our analysis indicates that these international trade linkage impacts are generally negative and range from near zero to very large overall, depending on the region, and that own- and cross-country impacts differ by region as well. At the same time, we find that China is able to capitalize on the situation by actually being able to increase its exports through international trade following mandatory closures in other regions. We also confirm that the US economy was relatively insulated from trade linkages with the rest of the world. Sectoral impacts provide further insight into the results.
ISSN:1864-4031
1864-404X
DOI:10.1007/s12076-021-00271-8