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The Geography of Pandemic Containment

Elisa Giannone, Nuno Miguel Marques da Paixao and Xinle Pang

Staff Working Papers from Bank of Canada

Abstract: How does interconnectedness affect the course of a pandemic? What are the optimal within- and between-state containment policies? We embed a spatial SIR model into a multi-sector quantitative trade model. We calibrate it to US states and the COVID-19 pandemic and find that interconnectedness increases the death toll by 146,200 lives. A local within-state containment policy minimizes welfare losses relative to a national policy or to one that reduces mobility between states. The optimal policy combines local within- and between-state restrictions and saves 289,300 lives. This optimal policy induces a peak reduction in mobility of 25.97% that saves approximately 23% more lives. Different timing of policies across states is key to minimize losses. States like South Carolina might have imposed internal lockdowns too early but travel restrictions too late.

Keywords: Coronavirus disease (COVID-19); Economic models; Regional economic developments (search for similar items in EconPapers)
JEL-codes: F1 H0 I1 R1 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2021-06
New Economics Papers: this item is included in nep-ure
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Handle: RePEc:bca:bocawp:21-26