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Globalization and Pandemics

Author

Listed:
  • Pol Antràs
  • Stephen J. Redding
  • Esteban Rossi-Hansberg

Abstract

We provide theory and evidence on the relationship between globalization and pandemics. Business travel facilitates trade and travel leads to human interactions that transmit disease. Trade-motivated travel generates an epidemiological externality across countries. 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. 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, which initially reduces the ratio of trade to output.

Suggested Citation

  • Pol Antràs & Stephen J. Redding & Esteban Rossi-Hansberg, 2023. "Globalization and Pandemics," American Economic Review, American Economic Association, vol. 113(4), pages 939-981, April.
    • Handle: RePEc:aea:aecrev:v:113:y:2023:i:4:p:939-81
    DOI: 10.1257/aer.20201479
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    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • Z31 - Other Special Topics - - Tourism Economics - - - Industry Studies

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