shock has a considerable impact on most economies in the world, especially when a share of the labor force is quarantined … networks. In this paper we incorporate production barriers induced by COVID-19 shock into a Ricardian model with sectoral … of the disruption in production that started in China and then quickly spread across the world. We find that the COVID-19 …

due to a fiscal policy shock, as compared to when the rise in output is due to a positive technology shock. The cross ….75 when the rise in output follows from a favorable output shock …

outbreak. We predict the cumulative loss in world output one year after the uncertainty shock due to Covid-19 to be about 14% …We estimate a three-variate VAR using proxies of global financial uncertainty, the global financial cycle, and world …

(in contrast to final goods trade) in transmitting the shock. In a hypothetical world without GVCs, the welfare loss due … with input-output linkages to gauge the effects of this adverse supply shock in China on the global economy through … countries even gain from the shock due to trade diversion. As a key methodological contribution, we quantify the role of GVCs …

. The MP links significantly amplified the impact of these shocks on the rest of the world, which had a much greater impact …