Pandemics Fragilities: The Double-Coincidence of a Halt in Hyper-specialized GVC and the Big-Dollar-Hunger

The risk of pandemics or natural disasters made clear the cascading damages of an un-diversified global value chain (trade fragilities), also for basic retail products. The halt in dollar-denominated payments to intermediate good firms from countries pivotal in the Global Value Chain (GVC) induced a big dollar hunger and the exorbitant duty of the Fed to activate emergency swap lines (monetary fragilities). As days into the pandemic pass, new economic fragilities emerge that call for more profound reflections of the current economic model.

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