  To prevent the spread of COVID-19, many cities, states, and countries have
`locked down', restricting economic activities in non-essential sectors. Such
lockdowns have substantially shrunk production in most countries. This study
examines how the economic effects of lockdowns in different regions interact
through supply chains, a network of firms for production, simulating an
agent-based model of production on supply-chain data for 1.6 million firms in
Japan. We further investigate how the complex network structure affects the
interactions of lockdowns, emphasising the role of upstreamness and loops by
decomposing supply-chain flows into potential and circular flow components. We
find that a region's upstreamness, intensity of loops, and supplier
substitutability in supply chains with other regions largely determine the
economic effect of the lockdown in the region. In particular, when a region
lifts its lockdown, its economic recovery substantially varies depending on
whether it lifts lockdown alone or together with another region closely linked
through supply chains. These results propose the need for inter-region policy
coordination to reduce the economic loss from lockdowns.
