Article in Journal

Effects on Foreign Trade

Lisandra Flach, Marina Steininger
ifo Institut, München, 2020

ifo Schnelldienst, 2020, 73, Nr. 07, 17-23

Covid-19 and lockdown-related production disruptions are transmitted across countries by means of global supply chains. The pandemic is also leading to a decline in real income in Germany, although the impact of the crisis is different in the various Länder and sectors. The manufacturing industry is the hardest hit, especially the automotive and pharmaceutical industries and mechanical engineering. Sectors and Länder where employees have greater opportunities for teleworking are less affected by the crisis. It is true that sectors that are more integrated into global value chains are likely to experience greater negative effects. But in a deglobalized world, the negative effects of policy interventions due to Covid-19 would be only marginally smaller. At the same time, Germany’s economic strength would be many times lower than it is today. Renationalization and the recovery of production would lead to significantly higher income losses.

Keywords: Globalisierung, Epidemie, Wirtschaftsentwicklung, Deutschland
JEL Classification: O100, E600