Introduction: Global value chains and economic dislocations

Publication date: 29 Apr 2020 | Publication type: National Institute Economic Review | Theme: Macroeconomics | NIESR Author(s): Rincon-Aznar, A; Mao, X; Tong, M | Journal: National Institute Economic Review Issue 252 | Publisher: Cambridge University Press

The world is undergoing an unprecedented shock as a result of the Covid-19 pandemic and the resulting lockdowns in nearly all economies. As major world economies are being put on hold, millions of jobs and incomes are being lost, which has created an imperative for economic policy actions. Government healthcare responses have so far been aimed at containment with measures aimed at slowing the rate of infection and limiting social and work-related interactions, accompanied by fiscal and monetary policies to support businesses and protect people’s incomes. Despite these measures, it is becoming clear that the economic and social consequences of the current crisis will be profound and long lasting, and still largely uncertain, and highlight the extent to which the economic crisis is transmitted not only through domestic policies but the severe disruption to trade in global supply chains, which account for two thirds of world trade (Baldwin and Lopez-Gonzalez, 2015). 

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