Applying import-adjustmed demand methodology to trade analysis during the COVID-19 crisis

In this paper, we estimated the standard (macro-economic) import equation over the period 1995-2021Q2, using an import intensity-adjusted measure of aggregate demand (IAD) calculated from input-output tables at country level, and compared the results with regressions using GDP. Initially introduced by Bussière (2013), this "synthetic" concept of IAD was perfected, inter alia, by the IMF (2016) and by us (2017), with a view to explaining the "missing" trade flows unpredicted by GDP-based import models during the trade collapse of 2009 and subsequent recovery from it.