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Understanding the impact of the COVID-19 pandemic through an import-adjusted breakdown of euro area aggregate demand

Author

Listed:
  • Andersson, Malin
  • Beck, Leyla
  • Sun, Yiqiao

Abstract

The coronavirus (COVID-19) pandemic and the lockdown measures to contain its spread caused large cumulated losses in euro area domestic demand in the first half of 2020, with a rebound in the third quarter of the year, according to the standard expenditure-based breakdown of GDP. However, an adjustment for import intensities derived from input-output data shows that external factors have also contributed significantly to growth dynamics in 2020. While an extended analysis based on ratios of sectoral imports to value added as a proxy suggests that import intensities may have, in aggregate, risen somewhat in the current crisis, this does not have a significant impact on the alternative, import-adjusted GDP breakdown for 2020. JEL Classification: E21, E23, E32

Suggested Citation

  • Andersson, Malin & Beck, Leyla & Sun, Yiqiao, 2021. "Understanding the impact of the COVID-19 pandemic through an import-adjusted breakdown of euro area aggregate demand," Economic Bulletin Boxes, European Central Bank, vol. 8.
    • Handle: RePEc:ecb:ecbbox:2021:0008:4
    Note: 427284
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    Citations

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    Cited by:

    1. António Rua & Fátima Cardoso, 2021. "Unveiling the real contribution of final demand to GDP growth," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.

    More about this item

    Keywords

    Economic growth; imports; input output;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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