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Spatial transmission of the economic impacts of COVID-19 through international trade

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  • Adam Rose

    (University of Southern California (USC))

  • Terrie Walmsley

    (University of Southern California (USC)
    Dornsife College of Letters, University of Southern California (USC))

  • Dan Wei

    (University of Southern California (USC))

Abstract

While most of the attention to COVID-19 is being focused on the physical transmission of the virus across country borders, there is also an analogous spatial transmission of economic impacts through international trade and global supply chains. This paper presents an analysis of the extent to which the economic shocks of mandatory closures to mitigate the pandemic ripple through the world economy. We utilize a state-of-the-art computable general equilibrium (CGE) model to analyze these interconnections through international trade. We compare estimates of the impacts on US GDP in isolation and then examine the impacts taking into account US trade with China and the rest of the world (ROW). Our analysis indicates that these international trade linkage impacts are generally negative and range from near zero to very large overall, depending on the region, and that own- and cross-country impacts differ by region as well. At the same time, we find that China is able to capitalize on the situation by actually being able to increase its exports through international trade following mandatory closures in other regions. We also confirm that the US economy was relatively insulated from trade linkages with the rest of the world. Sectoral impacts provide further insight into the results.

Suggested Citation

  • Adam Rose & Terrie Walmsley & Dan Wei, 2021. "Spatial transmission of the economic impacts of COVID-19 through international trade," Letters in Spatial and Resource Sciences, Springer, vol. 14(2), pages 169-196, August.
    • Handle: RePEc:spr:lsprsc:v:14:y:2021:i:2:d:10.1007_s12076-021-00271-8
    DOI: 10.1007/s12076-021-00271-8
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    References listed on IDEAS

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    Cited by:

    1. Damilola Giwa-Daramola & Harvey S. James, 2023. "COVID-19 and Microeconomic Resilience in Sub-Saharan Africa: A Study on Ethiopian and Nigerian Households," Sustainability, MDPI, vol. 15(9), pages 1-25, May.
    2. Erika Cantor & Rodrigo Salas & Romina Torres, 2022. "Femicide and Attempted Femicide before and during the COVID-19 Pandemic in Chile," IJERPH, MDPI, vol. 19(13), pages 1-13, June.
    3. Alexandru Bănică & Ionel Muntele, 2023. "Local and regional factors of spatial differentiation of the excess mortality related to the COVID-19 pandemic in Romania," Letters in Spatial and Resource Sciences, Springer, vol. 16(1), pages 1-21, December.
    4. Massimiliano Crisci & Federico Benassi & Hamidreza Rabiei-Dastjerdi & Gavin McArdle, 2022. "Spatio-temporal variations and contextual factors of the supply of Airbnb in Rome. An initial investigation," Letters in Spatial and Resource Sciences, Springer, vol. 15(2), pages 237-253, August.
    5. Walmsley, Terrie & Rose, Adam & John, Richard & Wei, Dan & Hlávka, Jakub P. & Machado, Juan & Byrd, Katie, 2023. "Macroeconomic consequences of the COVID-19 pandemic," Economic Modelling, Elsevier, vol. 120(C).
    6. Matthew S. Lyons, 2023. "The economic impact of COVID-19 on the creative industries: a sub-regional input–output approach," Letters in Spatial and Resource Sciences, Springer, vol. 16(1), pages 1-12, December.

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