The COVID-19 Pandemic, Air Transport Perturbation, and Sector Impacts in ASEAN Plus Five: A Multiregional Input–Output Inoperability Analysis

Tamat Sarmidi, Norlin Khalid, Muhamad Rias K. V. Zainuddin and Sufian Jusoh
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Tamat Sarmidi: Faculty of Economics and Management, Universiti Kebangsaan Malaysia
Norlin Khalid: Faculty of Economics and Management, Universiti Kebangsaan Malaysia
Muhamad Rias K. V. Zainuddin: Faculty of Business, Economics and Social Development, Universiti Malaysia Terengganu
Sufian Jusoh: Institute of Malaysian and International Studies, Universiti Kebangsaan Malaysia

No DP-2021-01, Working Papers from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: This study simulates the sector impacts of demand-side perturbations on air transport sectors due to the COVID-19 pandemic, focusing on ASEAN members plus Australia, China, Japan, the Republic of Korea, and New Zealand. This study involves (i) the generation of a multiregional input–output table from the latest Global Trade Analysis Project data, (ii) a network analysis to determine the importance of the air transport industry in each country, (iii) multiplier and linkages analyses, (iv) determinations of sector impacts from demand-side perturbations on air transport sectors due to the COVID-19 pandemic, and (v) simulation of the effect of fiscal and monetary measures to mitigate the pandemic’s impact. This study demonstrates that the aviation industry is a key sector in domestic and regional economic activities, and the reduction in air transport consumer demand due to the pandemic is estimated to cause gross domestic product (GDP) reductions from 0.4% to 2.1%. Government intervention, through fiscal and monetary policies, has, however, mitigated severe impact, moderating GDP and value-added losses. Thus, a viable policy prescription for the aviation industry is of utmost importance.

Keywords: COVID-19; inoperability; multiregional input-output; sector impact (search for similar items in EconPapers)
JEL-codes: D57 L93 R41 (search for similar items in EconPapers)
Date: 2021-04-16
New Economics Papers: this item is included in nep-sea
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Citations: View citations in EconPapers (1)

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