Countries around the world have sought to stop the spread of the 2019 novel coronavirus (COVID-19) by severely restricting travel and in-person commercial activities. While it is too early to assess the cost of the current pandemics, we analyse the economic impacts of a set of “lockdowns” scenarios, using the latest developed modelling framework of global supply chains. We find that economic losses related to initial COVID-19 lockdowns are largely dependent on the number of countries imposing restrictions, and that losses are more sensitive to the duration of a lockdown than its strictness—suggesting that more severe restrictions can reduce economic damages if they successfully shorten the duration of a lockdown. However, a longer containment that can eradicate the disease imposes lower economic damages than a series of shorter ones. Our results also reveal some important vulnerabilities in global supply chains: Even countries that are not directly affected by COVID-19 can experience large losses (e.g., >20% of their GDP)—with such cascading impacts often occurring in low- and middle-income countries. Open and highly-specialized economies suffer particularly large losses (e.g., energy-exporting Central Asian countries or tourism-focused Caribbean countries). Supply bottlenecks and declines in consumer demand lead to especially large losses in globalized sectors such as electronics (production decreases of 13-53% across our scenarios) and automobiles (2-49%). Our findings suggest that earlier, stricter, and thus shorter lockdowns are likely to minimize overall economic damages, that a “go-slow” approach to lifting restrictions may reduce overall damages if it avoids further lockdowns, and that global supply chains will magnify economic losses in some countries and industry sectors regardless of direct effects of the coronavirus. Pandemics control is a public good but is dependent on the weakest link in the global division of production. Economic impacts can be only minimized if collective efforts are made to strengthen the least effective providers.


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Guan, D., Wang, D., Hallegatte, S., Davis, S., Huo, J., Li, S., Bai, Y., Lei, T., Xue, Q., Coffman, D., Cheng, D., Chen, P., Liang, X., Xu, B., Lu, X., Wang, S., Hubacek, K. & Gong, P. 2020, 'Global supply-chain effects of COVID-19 control measures', Nature Human Behaviour, 4, pp. 577-587. https://doi.org/10.1038/s41562-020-0896-8

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Last updated: 17 June 2022
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