strategy exploits the heterogeneous impact of the shock on importers. The results indicate that this relatively minor, non …-localized shock had a non-trivial economic impact on exposed firms and propagated downstream through affected suppliers. Additional … empirical tests, motivated by a simple theory, demonstrate that low-liquidity firms amplified its transmission …

. We document two new facts using VAR methods. First, a (positive) shock to future TFP generates a significant decline in …

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 … (in contrast to final goods trade) in transmitting the shock. In a hypothetical world without GVCs, the welfare loss due …

aggregate inflation. Quantitatively, we confirm the significant role of production networks in shock propagation, emphasizing …