Supply chains and trade flows volatility in the face of global shocks
Richard Baldwin The outbreak of the Covid-19 pandemic has caused a worldwide disruption in trade flows. According to the WTO, a 9.2% decline in the volume of world merchandise trade for 2020 is expected, with a rebound of 7.2% in 2021. The drop in trade is around two to three times larger than the drop predicted for world GDP (a drop of 3.5% is most recently forecasted by the IMF, in the updates to the World Economic Outlook released in January 2021). The adjustment is very heterogeneous – the WTO calculates 14.7% and 11.7% declines in export volumes in the US and Europe, respectively, and...
Source: voxeu.org