Template-Type: ReDIF-Paper 1.0
Title: COVID-19 Supply Chain Disruptions
Author-Name: Matthias Meier
Author-Email: m.meier@uni-mannheim.de
Author-Name: Eugenio Pinto
Author-Email: eugenio.p.pinto@frb.gov

Classification-JEL:
Keywords: Supply chain disruptions, Covid-19, industrial production

Abstract: We study the effects of international supply chain disruptions on real economic
activity and prices during the Covid-19 pandemic. We show that US sectors with
a high exposure to intermediate goods imports from China contracted significantly
and robustly more than other sectors. In particular, highly exposed sectors suffered
larger declines in production, employment, imports, and exports. Moreover, input and
output prices moved up relative to other sectors, suggesting that real activity declines
in sectors with a high China exposure were not particularly driven by a slump in
demand. Quantitatively, sectors at the third quartile of China exposures experienced
larger monthly production declines of 2.5 p.p. in March and 9.4 p.p. in April 2020 than
sectors at the first quartile. Differences in China exposures account for about 10% of
the cross-sectoral variance of industrial production growth during March and April.
The estimated effects are short-lived and dissipate by July 2020.

Note: 
Length: 34
Creation-Date: 2020-11
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp239
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2020_239