The Economic Case for Global Vaccinations: An Epidemiological Model with International Production Networks

Kalemli-Özcan, Sebnem, Çakmaklı, Cem, Selva Demiralp, Sevcan Yesiltas and Yıldırım, Muhammed A.

No 15710, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We develop a multi-sector-country model with input-output linkages to study the effects of sectoral demand and supply shocks within the global trade and production network. Using the model, we quantify output losses of advanced economies (AEs) stemming from lack of vaccinations in the emerging markets and developing economies (EMDEs) during Covid-19. The sectoral shocks for 65 countries and 35 sectors are based on changes in sectoral consumption demand and labor supply as a function of infections. Endogenous lockdowns triggered by lack of vaccinations in EMDEs hurt AEs via a shortage of intermediate inputs, higher import prices, and weak demand for their exports. We provide upper and lower bound estimates for negative output effects of global supply chain disruptions, depending on the degree of complementarity across factors of production. Vaccinating EMDEs is a high return investment for AEs to smooth out the economic impact of the pandemic in their home countries.

Keywords: Covid-19; Vaccination policy coordination; Sectoral shocks; Production networks (search for similar items in EconPapers)
JEL-codes: C67 D57 F00 F16 F17 I18 P45 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (33)

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Working Paper: The Economic Case for Global Vaccinations: An Epidemiological Model with International Production Networks (2021)
Working Paper: The Economic Case for Global Vaccinations: An Epidemiological Model with International Production Networks (2021)
Working Paper: The Economic Case for Global Vaccinations: An Epidemiological Model with International Production Networks (2021)
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