Lockdown shocks ripple through economy, challenging traditional production models.
The article explores how the Covid-19 lockdown affected the economy by studying how supply and demand shocks spread across different industries. The researchers created a model based on input-output relationships to predict these effects. They found that traditional production models were not enough to capture the impact of the pandemic. By analyzing which inputs were crucial for production in each industry, the model accurately predicted the economic effects of the lockdown in the UK. The study showed that the model's performance was influenced by both the production function used and the shock scenario applied. Additionally, they found that common metrics used to predict the impact of shocks were only somewhat helpful in this context.