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Disruptions in Global Supply Chains and Regional Output in Mexico during the COVID-19 Pandemic

Author

Listed:
  • Eva González
  • Cindy Rangel
  • Leonardo Torre
  • Alejandrina Salcedo
  • Jorge Alvarado

Abstract

The paper analyzes how the initial disruption in the supply of imported inputs associated to the COVID-19 pandemic may have induced heterogeneous responses in regional and sectoral gross output in México. Using the Regional Input-Output Matrices estimated by Banco de México, and the Supply Ghosh Model, the effects associated to the supply-side shock that ensued from the sudden reduction of imported inputs from China, the European Union, and the United States at the onset of the pandemic are calculated. The Northern region experienced the greatest contraction in gross output, while at the sectoral level, the manufacturing sector gross output was the most affected by the shock relative to a scenario with constant availability of inputs. These results are consistent with the fact that both, the Northern region and the manufacturing sector, are the most integrated to the global supply chain.

Suggested Citation

  • Eva González & Cindy Rangel & Leonardo Torre & Alejandrina Salcedo & Jorge Alvarado, 2024. "Disruptions in Global Supply Chains and Regional Output in Mexico during the COVID-19 Pandemic," Working Papers 2024-19, Banco de México.
    • Handle: RePEc:bdm:wpaper:2024-19
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    File URL: https://www.banxico.org.mx/publications-and-press/banco-de-mexico-working-papers/%7BFC51E4EC-53B2-F281-C728-900DB9CCE816%7D.pdf
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    References listed on IDEAS

    as
    1. Veronica Guerrieri & Guido Lorenzoni & Ludwig Straub & Iván Werning, 2022. "Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages?," American Economic Review, American Economic Association, vol. 112(5), pages 1437-1474, May.
    2. Jasper Verschuur & Elco E. Koks & Jim W. Hall, 2021. "Observed impacts of the COVID-19 pandemic on global trade," Nature Human Behaviour, Nature, vol. 5(3), pages 305-307, March.
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    Keywords

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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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