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Effects on Foreign Trade

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  • Lisandra Flach
  • Marina Steininger

Abstract

Covid-19 and lockdown-related production disruptions are transmitted across countries by means of global supply chains. The pandemic is also leading to a decline in real income in Germany, although the impact of the crisis is different in the various Länder and sectors. The manufacturing industry is the hardest hit, especially the automotive and pharmaceutical industries and mechanical engineering. Sectors and Länder where employees have greater opportunities for teleworking are less affected by the crisis. It is true that sectors that are more integrated into global value chains are likely to experience greater negative effects. But in a deglobalized world, the negative effects of policy interventions due to Covid-19 would be only marginally smaller. At the same time, Germany’s economic strength would be many times lower than it is today. Renationalization and the recovery of production would lead to significantly higher income losses.

Suggested Citation

  • Lisandra Flach & Marina Steininger, 2020. "Effects on Foreign Trade," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(07), pages 17-23, July.
    • Handle: RePEc:ces:ifosdt:v:73:y:2020:i:07:p:17-23
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    References listed on IDEAS

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    1. Dingel, Jonathan I. & Neiman, Brent, 2020. "How many jobs can be done at home?," Journal of Public Economics, Elsevier, vol. 189(C).
    2. Alessandro Sforza & Marina Steininger, 2020. "Globalization in the Time of Covid-19," CESifo Working Paper Series 8184, CESifo.
    3. Martin Braml & Feodora Teti & Rahel Aichele, 2020. "Pharmacy of the World or at the Mercy of the World Economy? Germany’s Foreign Trade in the Market for Drugs and Medical Equipment," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(05), pages 35-42, May.
    4. Rahel Aichele & Gabriel Felbermayr & Inga Heiland, 2013. "The Value-Added Content of International Trade: New Data, New Perspectives," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 66(05), pages 29-41, March.
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    Citations

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    Cited by:

    1. Felbermayr, Gabriel & Gans, Steffen & Mahlkow, Hendrik & Sandkamp, Alexander-Nikolai, 2021. "Decoupling Europe," Kiel Policy Brief 153, Kiel Institute for the World Economy (IfW Kiel).
    2. Thieß Petersen & Marcus Wortmann, 2022. "Autarkie und Offenheit — Überlegungen zur optimalen Balance einer offenen Volkswirtschaft [Autarky and Openness — Reflections on the Optimal Balance of an Open Economy]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 102(9), pages 709-715, September.
    3. Nicolas Bunde, 2021. "Covid-19 and Industry: Is the Crisis Leading to the Dismantling of Global Supply Chains?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 74(01), pages 54-57, January.
    4. Thomas Puls & Werner Olle & Heike Proff & Oliver Falck & Nina Czernich & Johannes Koenen & Florian Herrmann & Wolfgang Beinhauer & Stefan Reindl & Alexander Wottge & Roman Zitzelsberger & Ilka Horstme, 2021. "Structural Change in the Automotive Industry – Is the Pandemic Acting as an Accelerator?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 74(05), pages 03-35, May.

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    More about this item

    Keywords

    Globalisierung; Epidemie; Wirtschaftsentwicklung; Deutschland;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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