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Double-hit scenario of Covid-19 and global value chains

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  • Muhammad Zeshan

    (Norwegian University of Science and Technology (NTNU)
    Pakistan Institute of Development Economics (PIDE))

Abstract

Due to the Covid-19 pandemic, labor force is greatly confined by quarantine (social distancing), and limited units of labor and capital are available at the workplace. Millions of employees have lost their jobs and are facing financial hardships. Likewise, capital owners have become illiquid and possibly insolvent within months. This cycle seems to continue for other factors of production as well. Even after lifting quarantines, the global trade might take months (years) to return to its actual potential. Using the GTAP-VA model, the present study simulates the impact of the double-hit scenario of Covid-19 on the global value chains and identifies production losses in different sectors of the world economy.

Suggested Citation

  • Muhammad Zeshan, 2021. "Double-hit scenario of Covid-19 and global value chains," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(6), pages 8559-8572, June.
    • Handle: RePEc:spr:endesu:v:23:y:2021:i:6:d:10.1007_s10668-020-00982-w
    DOI: 10.1007/s10668-020-00982-w
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    References listed on IDEAS

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    1. Angel Aguiar & Badri Narayanan & Robert McDougall, 2016. "An Overview of the GTAP 9 Data Base," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(1), pages 181-208, June.
    2. World Bank, 2020. "The COVID-19 Pandemic [Pandémie De Covid-19]," World Bank Publications - Reports 33696, The World Bank Group.
    3. Yuqing Xing & Neal Detert, 2010. "How iPhone Widens the US Trade Deficits with the PRC?," GRIPS Discussion Papers 10-21, National Graduate Institute for Policy Studies.
    4. Alessandro Antimiani & Luca Salvatici & Ilaria Fusacchia, 2018. "GTAP-VA: An Integrated Tool for Global Value Chain Analysis," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 3(2), pages 69-105, December.
    5. Ozili, Peterson & Arun, Thankom, 2020. "Spillover of COVID-19: Impact on the Global Economy," MPRA Paper 99317, University Library of Munich, Germany.
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    Cited by:

    1. Muhammad Zeshan, 2022. "The Effective Rate of Protection in an Input-Output Framework," PIDE-Working Papers 2022:16, Pakistan Institute of Development Economics.
    2. Juan Antonio Galán-Gutiérrez & Rodrigo Martín-García, 2022. "Fundamentals vs. Financialization during Extreme Events: From Backwardation to Contango, a Copper Market Analysis during the COVID-19 Pandemic," Mathematics, MDPI, vol. 10(4), pages 1-23, February.

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