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

Abstract:

COVID-19 pandemic had a devastating effect on both lives and livelihoods in 2020. The arrival of effective vaccines can be a major game changer. However, vaccines are in short supply as of early 2021 and most of them are reserved for the advanced economies. We show that the global GDP loss of not inoculating all the countries, relative to a counterfactual of global vaccinations, is higher than the cost of manufacturing and distributing vaccines globally. We use an economic-epidemiological framework that combines a SIR model with international production and trade networks. Based on this framework, we estimate the costs for 65 countries and 35 sectors. Our estimates suggest that up to 49 percent of the global economic costs of the pandemic in 2021 are borne by the advanced economies even if they achieve universal vaccination in their own countries.

Notes:


In the news:
New Yorker: Why Rich Countries Should Subsidize Vaccination Around the World

CID Faculty Working Paper Series: 390
Keywords: COVID-19; Sectoral Infection Dynamics; Globalization; International I-O Linkages
JEL Codes: E61, F00, C51
Last updated on 03/31/2021