The Economic Linkages of Covid-19 Across Sectors and Regions in the UK

Abstract

This paper builds a spatial model of trade with supply-chain links to try to understand the effect of economic links and policies on the spread of the Covid-19 pandemic during the first wave across NUTS2 UK regions. We find that the fight to reduce infection rates was more successful in the UK than in the European Union. Our results imply that without the policy reaction in Europe, the number of deaths during the first wave of the pandemic would have been about 4,400,000 larger in the European Union and about 1,217,000 higher in the UK, and that these benefits vary greatly across UK regions. Comparing the effects of the policies implemented in the EU27 and in the UK, we estimate that, in the absence of European-Union’s anti-Covid-19 measures, the number of deaths in the UK would have been an 80% larger; and that UK antiCovid-19 measures saved 50,000 lives in the European Union and 1,200,000 lives in the UK.