PILLAR OF ECONOMIC SECURITY

Today's supply chain disruptions reaffirm the importance of a multilateral trading system based on WTO rules Economic security has come to the forefront of policy discussions, as a series of crises- most recently the COVID-19 pandemic and the war in Ukraine-have disrupted global supply chains....

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Bibliographic Details
Published inFinance & Development Vol. 60; no. 2; pp. 28 - 30
Main Author Ossa, Ralph
Format Trade Publication Article
LanguageEnglish
Published Washington International Monetary Fund 01.06.2023
Subjects
Costs
COVID-19
Externality
Geopolitics
Global economy
International trade
Intervention
Macroeconomics
Opportunity costs
Pandemics
Reshoring
Shortages
Suppliers
Supply chains
Tariffs
Trade policy
Argentina
United States > US
China
Ethiopia
Ukraine
Russia
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Summary:Today's supply chain disruptions reaffirm the importance of a multilateral trading system based on WTO rules Economic security has come to the forefront of policy discussions, as a series of crises- most recently the COVID-19 pandemic and the war in Ukraine-have disrupted global supply chains. Looking at macroeconomic data, WTO economists estimate that 19 percent of global exports are in "bottleneck" products, defined as products that have few suppliers but a large market share (Majune and Stolzenburg, forthcoming). McKinsey estimates that supply chain disruptions cost firms more than 40 percent of a year's profit every decade on average. The case for policy intervention A recent paper more formally analyzes the case for policy intervention in the face of potential supply chain disruptions (Grossman, Helpman, and Lhuillier 2023).
ISSN:0015-1947
1564-5142