The Potential Impact of COVID-19 on GDP and Trade: A Preliminary Assessment
By M. Maliszewska, Aaditya Mattoo, D. Mensbrugghe. 2020
506 citations recorded by the source corpus.
The virus that triggered a localized shock in China is now delivering a significant global shock. This study simulates the potential impact of COVID-19 on gross domestic product and trade, using a standard global computable general equilibrium model. It models the shock as underutilization of labor and capital, an increase in international trade costs, a drop in travel services, and a redirection of demand away from activities that require proximity between people. A baseline global pandemic scenario sees gross domestic product fall by 2 percent below the benchmark for the world, 2.5 percent for developing countries, and 1.8 percent for industrial countries. The declines are nearly 4 percent below the benchmark for the world, in an amplified pandemic scenario in which containment is assumed to take longer and which now seems more likely. The biggest negative shock is recorded in the output of domestic services affected by the pandemic, as well as in traded tourist services. Since the model does not capture fully the social isolation induced independent contraction in demand and the decline in investor confidence, the eventual economic impact may be different. This exercise is illustrative, because it is still too early to make an informed assessment of the full impact of the pandemic. But it does convey the likely extent of impending global economic pain, especially for developing countries and their potential need for assistance.
Subfields: Economics and Econometrics, Global and Planetary Change, Modeling and Simulation
View Paper: https://www.semanticscholar.org/paper/7bc79e6e93c71db5a7e438937b6c99723c6003cd
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Citations in the corpus
- DHP Framework: Digital Health Passports Using Blockchain - Use case on international tourism during the COVID-19 pandemic (2004, background): “travel agents saw a slowdown in bookings of 50% in March of 2020 [6].”