Trade Helped Cushion the World Economy’s Pandemic Plunge
White House adviser Peter Navarro wants U.S. manufacturers to return from producing goods abroad.
Photographer: Andrew Harrer/BloombergIf you listen to the politicians, you’ll hear the benefits of moving supply chains closer to home to avoid labor shocks like the lockdown of entire populations during a pandemic. Listen to economists, though, and they’ll lay out the costs.
According to new research by economists from the University of Michigan, Yale and the University of Texas at Austin, the average contraction in gross domestic product tied to the Covid-19 shock is expected to be 31.5%, with about a third of it attributed to kinks in global supply chains.