Pigovian Export Promotion and Cooperation in a Pandemic

Gerda Dewit () and Dermot Leahy
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Gerda Dewit: Department of Economics, Finance and Accounting, Maynooth University.

Economics Department Working Paper Series from Department of Economics, National University of Ireland - Maynooth

Abstract: We develop a model in which two vaccine-producing Â…rms from two developed countries supply vaccines to the developing world during a pandemic. Exporting developed countries experience a neg- ative externality from incomplete global vaccination. Both domestic and trade policies are examined. Alternative policy regimes of non-intervention, independent national policy and cooperation among exporters are considered. For each alternative, welfare levels of exporting and importing countries and global welfare are calculated. We derive conditions for cooperation among producing countries to attain higher global welfare than non-cooperation. In fact, in some circumstances cooperation among developed countries can even achieve the global optimum. Classification-F12, F13, H23, L13

Keywords: Cooperative and non-cooperative trade policy; Export promotion; Global externality; Global welfare; Pigovian subsidies (search for similar items in EconPapers)
Pages: 31 pages
Date: 2022
New Economics Papers: this item is included in nep-ind and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:may:mayecw:n317-22.pdf

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