Economic and Social Effects of the COVID-19 Pandemic and the Future of Global Value Chains

The COVID-19 crisis is unique in many respects, and as the IMF (World economic outlook April 2021. International Monetary Fund, p. 43, 2021a) puts it: “a crisis like no other.” A global economic contraction occurred that was unprecedented in its speed and depth. Support packages were put together in some parts of the world that also dwarfed anything seen up to that point. Also, the massive differences in how countries, sectors, and people were affected by the crisis is unusual in many respects. What is already visible is that national government policies are playing a significant role during the pandemic and its impact on social groups. In this comment, we will briefly assess the impacts of the COVID-19 pandemic up to now (July 2021) and discuss possible future trends for the reorganization of global value chains (GVCs). First, we will give an overview of the pandemic’s economic and social effects as well as various policy responses by governments and international organizations. Second, we will discuss the effects of the pandemic on GVCs as well as different scenarios of further restructuring dynamics in GVCs. To conclude, we will argue that although the COVID-19 pandemic might not fundamentally alter the current globalization model, it could serve as a catalyst for already ongoing changes.