China and World Output Impact of the Hubei Lockdown During the Coronavirus Outbreak

Abstract

Using a network approach, we estimate the output loss due to the lockdown of the Hubei province triggered by the coronavirus disease (COVID-19). Based on our most conservative estimate, China suffers about 4% loss of output from labor loss, and global output drops by 1% due to the economic contraction in China. About 40% of the impact is indirect, coming from spillovers through the supply chain inside and outside China.

Keywords: coronavirus; COVID-19; production network; labor shock; China; international trade

JEL Classification: E23, E24, F62