Covid-19's Effect on International Trade and Productivity



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In this paper, I aim to analyze the long-term effects from the Coronavirus epidemic in 2019, 2020 and 2021. Through the mechanism of international trade, my research aims to bridge the gap between the data we know and our expectations for the future. Within this research paper I begin with an augmented gravity trade regression using aggregated and sectorized data. I employ a case study to assess relative changes in the degree of Covid stringency. Relying on Arkolakis et. al (2012) and preliminary assumptions, I translate Covid's effect on trade into an effect on welfare and ultimately productivity. I conclude my research with a Solow model simulation and predict the components of growth for the next 50 years. Based on my research, I conclude that long term growth experiences a close to instantaneous drop in the level of inputs and outputs of growth.



Economics research, Growth theory, International trade, Coronavirus pandemic, Solow, Productivity, Economics