Supply Spillovers During the Pandemic: Evidence from High-Frequency Shipping Data

December 18, 2020

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Format: Chicago

Diego A. Cerdeiro, and Andras Komaromi. Supply Spillovers During the Pandemic: Evidence from High-Frequency Shipping Data, (USA: International Monetary Fund, 2020) accessed November 21, 2024

Disclaimer: 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.

Summary

World trade contracted dramatically during the global economic crisis induced by the COVID-19 pandemic. Disruptions in international supply chains were widely reported as governments imposed containment measures (lockdowns) to halt the spread of the disease. At the same time, demand declined as households and firms scaled back spending. This paper attempts to disentangle the supply and demand channels in trade by quantifying the causal effect of supply spillovers from lockdowns. We utilize a novel dataset of daily bilateral seaborne trade, and design a shift-share identification strategy that leverages geography-induced cargo delivery lags to track the transmission of supply disruptions across space. We find strong but short-lived supply spillovers of lockdowns through international trade. Moreover, the evidence is suggestive of the downstream propagation of countries’ lockdowns through global supply chains.

Subject: COVID-19, Financial sector policy and analysis, Foreign currency exposure, Health, Imports, International trade, Money, Plurilateral trade, Spillovers

Keywords: Asia and Pacific, COVID-19, Europe, Foreign currency exposure, Global, Government lockdown, Import growth, Imports, Lockdown exposure, Lockdown measure, Lockdown spillover, Lockdowns, Plurilateral trade, Spillovers, Supply chains., Supply disruption, Trade, WP

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/284
Stock No:

WPIEA2020284
ISBN:

9781513564746
ISSN:

1018-5941

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