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Spillovers from government policy during a crisis: Evidence from international trade during COVID‐19 lockdowns

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  • Miguel Cardoso
  • Brandon Malloy

Abstract

We examine how variation in the severity of government intervention in response to the COVID‐19 pandemic impacted trade, using a novel dataset on monthly bilateral trade flows between Canadian provinces and U.S. states. Our results show that differences in the collections of policy responses employed by states and provinces throughout the course of the pandemic have had a significant and heterogeneous impact in accounting for variation in changes in aggregate province‐state trade flows. Government interventions around workplace closures and gathering restrictions are associated with the largest drop in bilateral trade flows, especially when introduced by U.S. states and during periods when COVID‐19 case rates are rising, while many pandemic restrictions have no statistically significant impact on trade flows.

Suggested Citation

  • Miguel Cardoso & Brandon Malloy, 2024. "Spillovers from government policy during a crisis: Evidence from international trade during COVID‐19 lockdowns," Review of International Economics, Wiley Blackwell, vol. 32(3), pages 1238-1269, August.
    • Handle: RePEc:bla:reviec:v:32:y:2024:i:3:p:1238-1269
    DOI: 10.1111/roie.12722
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