 COVID-19 and trade: Simulated asymmetric lossChunding Li and Xin Lin Journal of Asian Economics, 2021, vol. 75, issue C Abstract: This paper uses 2018 data as a benchmark to build a numerical 26-country global general equilibrium model with trade cost and an endogenous trade imbalance structure. We assume that COVID-19 will increase the trade cost between countries and decrease labor supply in production. We use China’s trade data from January to April in 2020 to calibrate the influence level parameters and then simulate the trade effects of COVID-19 in China, the EU, the US, and the world. Our simulation results find that all countries’ trade and exports will be significantly hurt by the pandemic. Due to the trade diversion effect and the price growth effect, some countries will see an increase in import trade. Comparatively, the pandemic has the most negative impact on global trade, followed by the EU, the US, and China. As the pandemic deepens, the negative impact on trade will increase. The worldwide pandemic has the most significant impact on US trade, with an effect about 1.5 times that of the average world effect. Keywords: COVID-19; General equilibrium; Trade effects; Simulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:75:y:2021:i:c:s1049007821000567 DOI: 10.1016/j.asieco.2021.101327 Access Statistics for this article Journal of Asian Economics is currently edited by C. Wiemer More articles in Journal of Asian Economics from Elsevier |
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