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Andras Komaromi

goods. Our question is whether supply disruptions are related to (foreign) government-imposed lockdowns or voluntary behavioral changes such as firms and workers choosing to reduce activity beyond the stringency of official containment measures. We assume that these voluntary behaviors are driven by fear of contracting the disease, and we capture them through changes in confirmed cases and deaths. The results in column (7) confirm that the supply disruptions are indeed captured by the lockdown exposure variable, while foreign disease variables do not appear to

International Monetary Fund. Research Dept.
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.
International Monetary Fund. Research Dept.

course, these are only two countries in our sample, and even in these simple examples there are various possible confounding factors. To claim identification, we develop a rigorous shift-share regression design with appropriate control variables. Figure 1. Lockdown Exposure and Import Growth: Korea and the United States Source: Authors’ calculations using Automatic Identification System data collected by MarineTraffic. Note: Panels 1 and 2 show the distribution of travel times from China to Korea and the US West Coast, respectively. Our lockdown exposure

Andras Komaromi
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.