Globalization and Pandemics

Pol Antras, Stephen Redding and Esteban Rossi-Hansberg

No 27840, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We propose a theory of the relationship between globalization and pandemics. We start by documenting the importance of international trade for the diffusion of infections in several pandemics throughout history and by showing that trade and travel are closely intertwined. Motivated by this evidence, we build a framework in which business travel facilitates trade according to a constant elasticity gravity equation mediated by mobility frictions. In turn, travel leads to human interactions that transmit disease, as in the Susceptible-Infected-Recovered (SIR) model. We highlight three novel interactions between these two mechanisms. First, trade-motivated travel generates an epidemiological externality across countries. Therefore, reductions in international frictions affect the evolution of the epidemic in each country, and the condition for a pandemic to occur. Second, if infections lead to deaths, or reduce individual labor supply, we establish a general equilibrium social distancing effect, whereby increases in relative prices in unhealthy countries reduce travel to those countries. Third, if agents internalize the threat of infection, we show that their behavioral responses lead to a reduction in travel that is larger for higher-trade-cost locations, and hence leads to an initial fall in the ratio of trade to GDP in the early stages of the epidemic, before a subsequent recovery.

JEL-codes: F1 F2 F4 F6 I1 (search for similar items in EconPapers)
Date: 2020-09
New Economics Papers: this item is included in nep-int and nep-opm
Note: EFG EH IFM ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

Published as Pol Antràs & Stephen J. Redding & Esteban Rossi-Hansberg, 2023. "Globalization and Pandemics," American Economic Review, vol 113(4), pages 939-981.

Downloads: (external link)
http://www.nber.org/papers/w27840.pdf (application/pdf)

Related works:
Journal Article: Globalization and Pandemics (2023)
Working Paper: Globalization and Pandemics (2020)
Working Paper: Globalization and pandemics (2020)
Working Paper: Globalization and Pandemics (2020)
Working Paper: Globalization and pandemics (2020)
Working Paper: Globalization and Pandemics (2020)
Working Paper: Globalization and Pandemics (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:27840

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w27840

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().