Global Value Chains and U.S. Economic Activity During COVID-19


We investigate the role of global value chains in the declines of manufacturing employment and output in the U.S. during COVID-19. Specifically, we identify the role of global value chains by exploiting heterogeneity across industries in cross-country sourcing patterns and its interaction with exogenous cross-country variation in the containment policies introduced to combat the virus. We find that global value chains played a significant role in the decline of output and employment across U.S. manufactures. Moreover, we find a modest impact of diversifying or renationalizing global value chains in mitigating the economy’s exposure to foreign shocks.

Federal Reserve Bank of St. Louis Review
Jesse LaBelle
Jesse LaBelle
First-Year Economics PhD Student

Jesse LaBelle is a first-year PhD student in the Northwestern University Economics Department.