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Mariya Brussevich, Mr. Chris Papageorgiou, and Pauline Wibaux
This paper uses granular customs data from France to investigate propagation of the COVID-19 shock along the supply chains in 2020. It quantifies the effect of the COVID-19 shock on trade adjustment and identifies mitigating and amplifying factors contributing to French firms’ heterogeneous adjustment paths. Early in the pandemic, firms mainly responded to global lockdowns and spread of the virus by reducing trade volumes (intensive margin) as opposed to exiting from import and export markets (ex-tensive margin). However, adjustment along the extensive margin played a more important role in trade with developing countries. It is shown that the impact of lockdowns was stronger for final consumer goods and the trade recovery was predominantly demand-driven. More automated, inventory-intensive, older, and medium-sized firms were more insulated from the shock, whereas firms’ reliance on air transportation for shipping goods amplified the shock. Trade bans and promotion measures implemented by governments in response to the pandemic had little impact on aggregate trade flows.
Mr. Brad J. McDonald and Christian Henn
This paper investigates how trade flows are being affected by new discriminatory measures implemented during the global financial crisis. We match data on behind-the-border measures (e.g., bailouts and subsidies) and border measures implemented through April 2010 to monthly HS 4-digit bilateral trade data. Our estimation strategy relies on a first-differenced gravity equation and time-varying fixed effects to disentangle the impact of new discriminatory measures. Trade in exporter-importer pairs subject to new measures decreased by 5 to 8 percent relative to trade in the same product among pairs not subject to new measures. These product-level results imply global trade declines at the aggregate level of about 0.2 percent, or $30-35 billion a year. These aggregate figures would be higher, if one third of measures had not been excluded due to incomplete data. The paper then goes on to dissect protectionism’s trade impact by disaggregating measures by type, advanced/developing countries, regions, sectors, and time. Behind-the-border measures are found to have been more harmful than border measures at the product level. Among border measures, impacts tend to be higher for less transparent measures. Advanced countries are found to be responsible for 2/3 of the trade decline due to crisis protectionism, but their exports also absorbed 2/3 of this decline. When breaking down measures in a time dimension, we find that those taken in the first nine months after the Lehman collapse were most harmful and likely continue to constitute a drag on trade.
Mariya Brussevich, Mr. Chris Papageorgiou, and Pauline Wibaux

unlikely. This paper focuses on trade adjustment in the first year of the pandemic. However, a number pandemic-related shocks posed roadblocks to trade recovery in 2021, including the rise in shipping costs and repeated waves of the COVID-19 variants and subsequent lockdowns. For instance, while our findings show that the impact of the COVID-19 shock on export and import prices was limited in 2020, anecdotal evidence suggests that strong recovery in consumer demand and supply chains bottlenecks that emerged in 2021 contributed to the inflationary pressures. Going

Mariya Brussevich, Mr. Chris Papageorgiou, and Pauline Wibaux

, adjustment along the extensive margin played a more important role in trade with developing countries. It is shown that the impact of lockdowns was stronger for final consumer goods and the trade recovery was predominantly demand-driven. More automated, inventory-intensive, older, and medium-sized firms were more insulated from the shock, whereas firms’ reliance on air transportation for shipping goods amplified the shock. Trade bans and promotion measures implemented by governments in response to the pandemic had little impact on aggregate trade flows. RECOMMENDED

International Monetary Fund. External Relations Dept.

with Tudor Proprietary Trading. Recovery in Asia and prospects for Japan Describing the situation in Asia as “smooth sailing now, but still rough seas to navigate,” Bijan Aghevli said the Asian crisis countries had turned the corner earlier than forecasters had predicted. Although the economies were recovering at different rates, all were doing well. Three factors lay behind this strong resurgence, Aghevli said: stimulative policies, a turnaround in market sentiment, and the synergistic relationship among the countries. Stimulative policies . All the

Mr. Brad J. McDonald and Christian Henn

measures increased or decreased as the crisis subsided. We allow the disaggregate protectionist dummies to cover all measures in effect in a given period, no matter when they were implemented. In each of the tables we split the dummies into three periods according to the trend in global trade flows: (i) the trade collapse (up to January 2009), (ii) the trade stabilization (February-May 2009), and (iii) the trade recovery (from June 2009 onwards). 52. Measures taken during the first nine months after the Lehman collapse in September 2008 were particularly harmful