Natural and anthropogenic disasters frequently affect both the supply and demand sides of an economy. A striking recent example is the Covid-19 pandemic which has created severe disruptions to economic output in most countries. These direct shocks to supply and demand will propagate downstream and upstream through production networks. Given the exogenous shocks, we derive a lower bound on total shock propagation. We find that even in this best case scenario network effects substantially amplify the initial shocks. To obtain more realistic model predictions, we study the propagation of shocks bottom-up by imposing different rationing rules on industries if they are not able to satisfy incoming demand. Our results show that economic impacts depend strongly on the emergence of input bottlenecks, making the rationing assumption a key variable in predicting adverse economic impacts. We further establish that the magnitude of initial shocks and network density heavily influence model predictions.

自然和人为灾害经常影响经济的供需双方。最近一个引人注目的例子是 Covid-19 大流行，它对大多数国家的经济产出造成了严重破坏。这些对供需的直接冲击将通过生产网络向下游和上游传播。鉴于外生冲击，我们推导出总冲击传播的下限。我们发现，即使在这种最佳情况下，网络效应也会大大放大最初的冲击。为了获得更现实的模型预测，我们通过对无法满足新需求的行业施加不同的配给规则，自下而上研究冲击的传播。我们的结果表明，经济影响在很大程度上取决于投入瓶颈的出现，使配给假设成为预测不利经济影响的关键变量。我们进一步确定初始冲击的大小和网络密度严重影响模型预测。