It is now widely recognized that the outbreak of the COVID-19 pandemic triggered the most serious economic crisis in a long time. All economic sectors have been affected by the disruption to global supply chains, weaker demand for exported goods and services, a drop in international tourism, the halt to business travel, a lack of demand for domestic and imported goods and services and in some cases a combination of these factors. Beyond the massive loss of human life and the significant long-term negative effects on health, the pandemic has had a major effect on social and economic relationships. The pervasive measures of the lockdowns imposed to tackle the spread of the virus have fuelled the rapid transition from a health emergency to an economic one. Policymakers around the world must now confront a major reconsideration of all social activities (working relationships included) and the biggest economic crisis since World War II.

The speed at which the virus became a pandemic and the rapid transmission of the economic shocks show the extent to which the socio-economic relations of countries are intertwined. Despite stark differences between countries, the global reach of the health crisis and the international disruption of supply chains are reshaping both national economies and international relationships. The fact that countries are deeply interconnected means they are directly or indirectly exposed to shocks originating elsewhere in the world. Like the health shocks, the economic shocks are quickly transmitted along the chain of demand and supply relations, with the pace and strength dependent on the relative position and weight of each country. The overall final global impact is the result of the complex interaction of a range of national shocks. To outline both the scale and the consequences of the shock, we need to know the length of the health crisis, and the subsequent impact on economies. Regarding the former, the media and institutional organizations have been providing up-to-date data on the spread of the virus. However, the outbreak of new waves of contagion triggered new concerns, as well as new restrictions. While waiting to measure the beneficial effects from vaccination campaigns, countries are trying to strike a balance in coping with the virus, focusing on compensating for the damage caused by the economic crisis and devising new, less-costly containment measures. Recognizing the role played by the international structure of production and thus the foreign linkages that support countries’ economies is fundamental in this context. Many economies rely heavily on foreign inputs or foreign demand for their production.