Covid-19 Reveals Economic Domino Effect: Supply and Demand Shock Amplification.
The Covid-19 pandemic disrupted both supply and demand in the economies of Germany, Italy, and Spain. This caused ripple effects through production networks, amplifying the initial shocks. When industries face shortages, the economic impact depends on how they ration their resources. Input bottlenecks play a crucial role in predicting negative economic effects. The severity of the initial shocks and the density of the network greatly influence the outcomes.