{
  "title": "Sectoral Shocks and Spillovers: An Application to COVID-19",
  "publication": "IMF Working Papers, July 30, 2021",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2021/07/30/sectoral-shocks-and-spillovers-an-application-to-covid-19-462895",
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  "summary": "This paper examines the role of sectoral spillovers in propagating sectoral shocks in the broader economy, both in the past and during the COVID-19 pandemic.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Authors: Sonali Das, Giacomo Magistretti, Evgenia Pugacheva, Philippe Wingender\n- Publication date: July 30, 2021\n- Core question: How do sectoral spillovers propagate sectoral shocks through the broader economy, historically and during the COVID-19 pandemic?"
    },
    {
      "heading": "Methodology and Data",
      "content": "- Sample period: 1995 to 2014\n- Approach:\n  - Estimate effects of shocks that occur within a sector and spillovers from shocks to other sectors on sectoral activity.\n  - Measure supply shocks as changes in productivity at the sector level.\n  - Measure demand shocks as changes in government purchases at the sector level.\n  - Combine historical estimates with the network structure of global production to quantify spillovers from the COVID-19 economic shock."
    },
    {
      "heading": "Key Findings",
      "content": "- Both supply and demand shocks have large spillover effects on:\n  - Sector-level gross value added.\n  - A sector’s share of the economy.\n- Spillover effects from the pandemic:\n  - Are sizeable.\n  - Make up a significant fraction of the overall decline in activity in 2020.\n- Implication from results: Spillovers materially amplify sectoral shocks and therefore matter for understanding aggregate outcomes during crises such as COVID-19."
    },
    {
      "heading": "Policy Implications and Recommendations",
      "content": "- Policies with a sectoral dimension should account for:\n  - Direct within-sector shocks (productivity and government purchase changes).\n  - Indirect spillovers transmitted through sectoral linkages and the global production network.\n- Design of support and recovery strategies should incorporate estimated spillovers to better target interventions and mitigate amplified declines in activity.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2021/07/30/sectoral-shocks-and-spillovers-an-application-to-covid-19-462895"
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    "Authors: Sonali Das, Giacomo Magistretti, Evgenia Pugacheva, Philippe Wingender",
    "Published: July 30, 2021",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513587394.001",
    "Authors: Sonali Das, Giacomo Magistretti, Evgenia Pugacheva, Philippe Wingender",
    "Publication date: July 30, 2021",
    "Core question: How do sectoral spillovers propagate sectoral shocks through the broader economy, historically and during the COVID-19 pandemic?",
    "Sample period: 1995 to 2014",
    "Approach:",
    "Both supply and demand shocks have large spillover effects on:",
    "Spillover effects from the pandemic:",
    "Implication from results: Spillovers materially amplify sectoral shocks and therefore matter for understanding aggregate outcomes during crises such as COVID-19.",
    "Policies with a sectoral dimension should account for:",
    "Design of support and recovery strategies should incorporate estimated spillovers to better target interventions and mitigate amplified declines in activity.",
    "**Working Paper**"
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