Quantifying the global macroeconomic spillovers of illness and lockdown measures

This is a preview from the National Institute Economic Review, May 2020, no 252.

The Covid-19 pandemic has delivered a shock that is truly global in nature. Cases of the virus have been reported in nearly every single country and territory in the world. At least 135 countries across the globe, including all of the world’s largest economies, have introduced some form of containment measures or lockdowns.1 The global nature of the shock has greatly amplified its economic consequences, with an abrupt drop in the movement of people, goods and services across borders, as well as an unprecedented withdrawal of capital from emerging markets.

The analysis in this Box, prepared by Dawn Holland and Iana Liadze, measures global spillovers from the impact of illness and lockdown measures on domestic demand. In the current circumstances, these are likely to be exacerbated by the closure of borders and deeper disruptions to global supply
chains.