Projections for world trade
The WTO, in its April 2020 publication “Trade set to plunge as COVID-19 pandemic upends global economy”, predicted that world trade is set to decrease by between 13 and 32% in 2020 due to the COVID-19 pandemic. In particular:
- Trade is likely to fall more steeply in sectors characterized by complex value chain linkages, particularly in electronics and automotive products.
- Services trade may be the component of world trade most directly affected by COVID-19 through the imposition of transport and travel restrictions and the closure of many retail and hospitality establishments.
WTO: Projections for World Trade in 2020
By: Timothy Taylor – managing editor of Journal of Economic Perspectives
Rethinking Global Value Chains
In this presentation Pinelopi Goldberg talks about possible long-term effects of the pandemic on GVCs:
- Going forward the trade-off will not be between a closed and an open economy but rather between static and dynamic efficiency: static efficiency implies just-in-time production, minimization of redundant inventory etc. Economies have so far focused on static efficiency but during tail events redundancy and static inefficiency become a plus. From the point of view of GVCs a certain degree of redundancy may be optimal to increase resilience;
- In addition we will have to distinguish between “critical” goods for which we may want to hold reserves domestically and “other goods”.
International trade and supply chains after COVID-19
By: Pinelopi Goldberg – Yale University
Supply chain bottlenecks during a pandemic
In this paper Carvalho and al. address the questions: how can policymakers keep key supply chains functioning? Which firms are essential for meeting demand in a crisis?
We show how to design and deploy algorithms to pinpoint bottleneck firms in a system of firm-to-firm transactions. In particular, sourcing tools from machine learning and computer science, we propose scalable network algorithms which take as an input data on business-to-business transactions and output the set of essential (bottleneck) firms. Once these firms have been identified, the model can perform counterfactual analysis to consider the impact of policies to shore up the performance of key supply-chains such as food or medical supplies.
Supply Chain Bottlenecks in a Pandemic
Authors: Vasco Carvalho, Matt Elliott, John Spray
From: Cambridge University
