Shocks and economic disruption: Networks, insurance, and propagation

Monday, April 20, 2020

How might the economic consequences of the global pandemic spread through an economy?

This column reports evidence from a household survey of village communities in Thailand, which sheds light on how a large shock experienced by one household may be mitigated by informal insurance networks. If not insured, however, it will propagate to others through local supply chains, leading to longer-term low-productivity structural shifts.

The research findings indicate the importance of a robust public response and improved market infrastructure for shocks like Covid-19.

Read more in Global Dev.