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The Geography of Pandemic Containment

Author

Listed:
  • Elisa Giannone
  • Nuno Paixao
  • Xinle Pang

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.

Suggested Citation

  • Elisa Giannone & Nuno Paixao & Xinle Pang, 2021. "The Geography of Pandemic Containment," Staff Working Papers 21-26, Bank of Canada.
  • Handle: RePEc:bca:bocawp:21-26
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    References listed on IDEAS

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    More about this item

    Keywords

    Coronavirus disease (COVID-19); Economic models; Regional economic developments;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • H0 - Public Economics - - General
    • I1 - Health, Education, and Welfare - - Health
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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