Front Matter Page Asia and Pacific Department and Innovation Lab Unit
II. A Shift-Share Design on High-Frequency Trade Data
III. High-Frequency Data and Variable Construction
V. Indirect Supply-Chain Effects
1. LockdownExposure and Import Growth: The cases of Korea and the U.S.
2. Construction of Port-to-Port Trade Volumes from AIS data
3. The Distribution of Travel Times in Shipping
4. Lockdown Spillovers: Strong but Short-Lived
5. Ratio of Actual v. Counterfactual World Trade
time when worldwide lockdowns were the most stringent.
A country’s imports during the pandemic are affected by the lockdowns imposed by the country’s trading partners that supply these goods. We thus propose and construct a measure of lockdownexposure to trace the effects of these supply-side disruptions. The lockdownexposure of a country is a weighted average of daily indices of lockdown stringency for each of its trading partners. The weights account for the intensity of the bilateral trade linkages, while the suppliers’ lockdown measures are lagged
these measures. Although the effects of the crisis on cross-border transactions were widely reported in the press, 2 data availability has constrained most empirical research to understanding domestic effects. We aim to fill this gap by using daily bilateral trade volume information and exploiting geography-induced lags in how disruptions transmit across borders.
A country’s imports during the pandemic are affected by the lockdown measures imposed by the country’s partners that supply these goods. We thus propose and construct a measure of lockdownexposure to
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.
This issue of the IMF Research Perspective looks at the inter-connectedness of the world economic system and how diverse shocks can affect global supply chains. The articles in this issue track the way COVID-19 triggered disruptions in the supply chain and explains why trade networks are so difficult to disentangle. However, the pandemic is not the only event affecting global supply chains; cross-border spillovers of technology wars and natural disasters are other factors to consider. The overarching message from these articles is clear: there is a need for international cooperation to deal with the consequences of these shocks—whether it is ending the COVID-19 pandemic or mitigating climate change.
This paper documents the impact of the COVID-19 pandemic and associated lockdowns on the Colombian labor market using household micro-data. About a quarter of employment was temporarily disrupted at the height of the first pandemic-induced lockdown in 2020. Women, the young, and the less educated were the most affected groups. Since then, a remarkable recovery, led by a rebound in informal employment, has taken place. By adjusting both employment levels and hours faster, the informal sector acted as an important margin of adjustment, particularly in those industries most affected by the first lockdown. The informal sector also appears to have played a role in decreasing the sensitivity of aggregate employment to more recent lockdowns in 2021, as the economy has learned to cope with pandemic restrictions, although the possibility of higher informality rates becoming embedded remains an substantial downside risk for long-term productivity.
I n f = I n f D e c − I n f M a y Δ n e t I n f = I n f D e c − I n f F e b
B. Details on the Measure of LockdownExposure
We follow Alfaro et al. (2020) in the classification of subindustries that were affected by the operational restrictions through Decree 457 of the 25 th of March 2020 (see Table A2 in the original paper). The authors classify subindustries as directly exposed to the lockdown in a binary way: 0 for “not exposed”and 1 for “exposed”. We then combine the subsectors to a higher level of aggregation, using employment in 2019 from the
International Monetary Fund. Asia and Pacific Dept
measures imposed in Asia in January and February impacted U.S. West Coast ports around two weeks later. As the ripple effects of these lockdowns reached its shores, U.S. West Coast import growth fell significantly.
Estimated world containerized exports
(In percent, ratio of volume to 2017–19 average)
Source: Cerdeiro et al (WP 20/57).
The evidence points to large but short-lived supply disruptions driven by lockdowns . A model of daily seaborne import growth based on foreign lockdownexposures points to strong spillovers from lockdowns. Based countries
International Monetary Fund. Asia and Pacific Dept
The Chinese economy continues its fast recovery from the health and economic crisis as a strong containment effort and macroeconomic and financial policy support have mitigated the crisis impact and helped the economy rebound. However, growth is still unbalanced as the recovery has relied heavily on public support while private consumption is lagging. Rising financial vulnerabilities and the increasingly challenging external environment pose risks to the outlook. Important reforms have progressed despite the crisis, but unevenly across key areas.