IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/15710.html
   My bibliography  Save this paper

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

Author

Listed:
  • Kalemli-Özcan, Sebnem
  • Çakmaklı, Cem
  • Demiralp, Selva
  • Yesiltas, Sevcan
  • Yıldırım, Muhammed A.

Abstract

We develop a multi-sector-country model with input-output linkages to study the effects of sectoral demand and supply shocks within the global trade and production network. Using the model, we quantify output losses of advanced economies (AEs) stemming from lack of vaccinations in the emerging markets and developing economies (EMDEs) during Covid-19. The sectoral shocks for 65 countries and 35 sectors are based on changes in sectoral consumption demand and labor supply as a function of infections. Endogenous lockdowns triggered by lack of vaccinations in EMDEs hurt AEs via a shortage of intermediate inputs, higher import prices, and weak demand for their exports. We provide upper and lower bound estimates for negative output effects of global supply chain disruptions, depending on the degree of complementarity across factors of production. Vaccinating EMDEs is a high return investment for AEs to smooth out the economic impact of the pandemic in their home countries.

Suggested Citation

  • Kalemli-Özcan, Sebnem & Çakmaklı, Cem & Demiralp, Selva & Yesiltas, Sevcan & Yıldırım, Muhammed A., 2021. "The Economic Case for Global Vaccinations: An Epidemiological Model with International Production Networks," CEPR Discussion Papers 15710, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:15710
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP15710
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Cem Cakmakli & Yasin Simsek, 2020. "Bridging the COVID-19 Data and the Epidemiological Model using Time Varying Parameter SIRD Model," Papers 2007.02726, arXiv.org, revised Feb 2021.
    2. Laura Alfaro & Oscar Becerra & Marcela Eslava, 2020. "EMEs and COVID-19: Shutting Down in a World of Informal and Tiny Firms," NBER Working Papers 27360, National Bureau of Economic Research, Inc.
    3. Fernando Alvarez & David Argente, 2020. "A Simple Planning Problem for COVID-19 Lockdown," Working Papers 2020-34, Becker Friedman Institute for Research In Economics.
    4. Peter Horvát & Colin Webb & Norihiko Yamano, 2020. "Measuring employment in global value chains," OECD Science, Technology and Industry Working Papers 2020/01, OECD Publishing.
    5. Dirk Kruger & Harald Uhlig & Taojun Xie, 2020. "Macroeconomic Dynamics and Reallocation in an Epidemic," Working Papers 2020-43, Becker Friedman Institute for Research In Economics.
    6. Vasco M Carvalho & Makoto Nirei & Yukiko U Saito & Alireza Tahbaz-Salehi, 0. "Supply Chain Disruptions: Evidence from the Great East Japan Earthquake," The Quarterly Journal of Economics, Oxford University Press, vol. 136(2), pages 1255-1321.
    7. Martin S Eichenbaum & Sergio Rebelo & Mathias Trabandt, 2021. "The Macroeconomics of Epidemics [Economic activity and the spread of viral diseases: Evidence from high frequency data]," The Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5149-5187.
    8. James H. Stock, 2020. "Data Gaps and the Policy Response to the Novel Coronavirus," NBER Working Papers 26902, National Bureau of Economic Research, Inc.
    9. Dingel, Jonathan I. & Neiman, Brent, 2020. "How many jobs can be done at home?," Journal of Public Economics, Elsevier, vol. 189(C).
    10. Bonadio, Barthélémy & Huo, Zhen & Levchenko, Andrei A. & Pandalai-Nayar, Nitya, 2021. "Global supply chains in the pandemic," Journal of International Economics, Elsevier, vol. 133(C).
    11. Laura Alfaro & Oscar Becerra & Marcela Eslava, 2020. "EMEs and COVID-19 Shutting Down in a World of Informal and Tiny Firms Laura Alfaro, Oscar Becerra y Marcela Eslava," Documentos CEDE 18193, Universidad de los Andes, Facultad de Economía, CEDE.
    12. Veronica Guerrieri & Guido Lorenzoni & Ludwig Straub & Iván Werning, 2022. "Macroeconomic Implications of COVID-19: Can Negative Supply Shocks Cause Demand Shortages?," American Economic Review, American Economic Association, vol. 112(5), pages 1437-1474, May.
    13. Farhi, Emmanuel & Baqaee, David Rezza, 2020. "Nonlinear Production Networks with an Application to the Covid-19 Crisis," CEPR Discussion Papers 14742, C.E.P.R. Discussion Papers.
    14. R Maria del Rio-Chanona & Penny Mealy & Anton Pichler & François Lafond & J Doyne Farmer, 0. "Supply and demand shocks in the COVID-19 pandemic: an industry and occupation perspective," Oxford Review of Economic Policy, Oxford University Press, vol. 36(Supplemen), pages 94-137.
    15. Andrew Atkeson, 2020. "How Deadly is COVID-19? Understanding the Difficulties with Estimation of its Fatality Rate," Staff Report 598, Federal Reserve Bank of Minneapolis.
    16. Jean-Noël Barrot & Basile Grassi & Julien Sauvagnat, 2021. "Sectoral Effects of Social Distancing," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 277-281, May.
    17. Goolsbee, Austan & Syverson, Chad, 2021. "Fear, lockdown, and diversion: Comparing drivers of pandemic economic decline 2020," Journal of Public Economics, Elsevier, vol. 193(C).
    18. Farboodi, Maryam & Jarosch, Gregor & Shimer, Robert, 2021. "Internal and external effects of social distancing in a pandemic," Journal of Economic Theory, Elsevier, vol. 196(C).
    19. R Maria del Rio-Chanona & Penny Mealy & Anton Pichler & François Lafond & J Doyne Farmer, 2020. "Supply and demand shocks in the COVID-19 pandemic: an industry and occupation perspective," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 36(Supplemen), pages 94-137.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aslim, Erkmen Giray & Fu, Wei & Tekin, Erdal & You, Shijun, 2023. "From Syringes to Dishes: Improving Food Security through Vaccination," IZA Discussion Papers 16009, Institute of Labor Economics (IZA).
    2. Chad P. Bown & Thomas J. Bollyky, 2022. "How COVID‐19 vaccine supply chains emerged in the midst of a pandemic," The World Economy, Wiley Blackwell, vol. 45(2), pages 468-522, February.
    3. Bonadio, Barthélémy & Huo, Zhen & Levchenko, Andrei A. & Pandalai-Nayar, Nitya, 2021. "Global supply chains in the pandemic," Journal of International Economics, Elsevier, vol. 133(C).
    4. Alexander Chudik & M. Hashem Pesaran & Alessandro Rebucci, 2023. "Social Distancing, Vaccination and Evolution of COVID-19 Transmission Rates in Europe," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 71(2), pages 474-508, June.
    5. Veronika Grimm & Franziska K. Lembcke & Milena Schwarz, 2021. "Impffortschritt in Deutschland und der Welt: Chancen und Risiken [Opportunities and Risks of Vaccination Progress]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(4), pages 266-275, April.
    6. Ricardo Hausmann & Ulrich Schetter & Muhammed A. Yildirim, 2022. "On the Design of Effective Sanctions: The Case of Bans on Exports to Russia," CID Working Papers 417, Center for International Development at Harvard University.
    7. Laurence S. J. Roope & Adrian Barnett & Paolo Candio & Mara Violato & Raymond Duch & Philip M. Clarke, 2022. "Is There Broad-Based Support in High-Income Countries for COVID-19 Vaccine Donation? Evidence from Seven Countries," Applied Health Economics and Health Policy, Springer, vol. 20(1), pages 55-65, January.
    8. Yang Ye & Qingpeng Zhang & Xuan Wei & Zhidong Cao & Hsiang-Yu Yuan & Daniel Dajun Zeng, 2022. "Equitable access to COVID-19 vaccines makes a life-saving difference to all countries," Nature Human Behaviour, Nature, vol. 6(2), pages 207-216, February.
    9. Fu, Yuting & Jin, Hanqing & Xiang, Haitao & Wang, Ning, 2022. "Optimal lockdown policy for vaccination during COVID-19 pandemic," Finance Research Letters, Elsevier, vol. 45(C).
    10. L'aszl'o Czaller & GergH{o} T'oth & Bal'azs Lengyel, 2021. "Vaccine allocation to blue-collar workers," Papers 2104.04639, arXiv.org.
    11. Philip Clarke & Laurence Roope & Peter Loewen & Jean-François Bonnefon & Alessia Melegaro & Jorge Friedman & Mara Violato & Adrian Barnett & Raymond Duch, 2021. "Public opinion on global rollout of COVID-19 vaccines," Post-Print hal-03261784, HAL.
    12. Linus Nyiwul, 2021. "Epidemic Control and Resource Allocation: Approaches and Implications for the Management of COVID-19," Studies in Microeconomics, , vol. 9(2), pages 283-305, December.
    13. Jiang, Peng & Klemeš, Jiří Jaromír & Fan, Yee Van & Fu, Xiuju & Tan, Raymond R. & You, Siming & Foley, Aoife M., 2021. "Energy, environmental, economic and social equity (4E) pressures of COVID-19 vaccination mismanagement: A global perspective," Energy, Elsevier, vol. 235(C).
    14. Zheng, Huanhuan, 2023. "Sovereign debt responses to the COVID-19 pandemic," Journal of International Economics, Elsevier, vol. 143(C).
    15. Jean-Charles Bricongne & Juan Carluccio & Lionel Fontagné & Guillaume Gaulier & Sebastian Stumpner, 2022. "From Macro to Micro: Large Exporters Coping with Common Shocks," Working papers 881, Banque de France.
    16. Alexander Chudik & M. Hashem Pesaran & Alessandro Rebucci, 2021. "COVID-19 Time-Varying Reproduction Numbers Worldwide: An Empirical Analysis of Mandatory and Voluntary Social Distancing," Globalization Institute Working Papers 407, Federal Reserve Bank of Dallas.
    17. Ali K k & Erg n Y kseltan & Mustafa Hekimo lu & Esra Agca Aktunc & Ahmet Y cekaya & Ay e Bilge, 2022. "Forecasting Hourly Electricity Demand Under COVID-19 Restrictions," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 73-85.
    18. D. G. Webster & Semra A. Aytur & Mark Axelrod & Robyn S. Wilson & Joseph A. Hamm & Linda Sayed & Amber L. Pearson & Pedro Henrique C. Torres & Alero Akporiaye & Oran Young, 2022. "Learning from the Past: Pandemics and the Governance Treadmill," Sustainability, MDPI, vol. 14(6), pages 1-26, March.
    19. Agarwal,Ruchir & Reed,Tristan, 2021. "How to End the COVID-19 Pandemic by March 2022," Policy Research Working Paper Series 9632, The World Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Çakmaklı, Cem & Demiralp, Selva & Özcan, Şebnem Kalemli & Yeşiltaş, Sevcan & Yıldırım, Muhammed A., 2023. "COVID-19 and emerging markets: A SIR model, demand shocks and capital flows," Journal of International Economics, Elsevier, vol. 145(C).
    2. David Baqaee & Emmanuel Farhi & Michael J. Mina & James H. Stock, 2020. "Reopening Scenarios," NBER Working Papers 27244, National Bureau of Economic Research, Inc.
    3. Bonadio, Barthélémy & Huo, Zhen & Levchenko, Andrei A. & Pandalai-Nayar, Nitya, 2021. "Global supply chains in the pandemic," Journal of International Economics, Elsevier, vol. 133(C).
    4. Christopher Cotton & Bahman Kashi & Huw Lloyd‐Ellis & Frederic Tremblay & Brett Crowley, 2022. "Quantifying the economic impacts of COVID‐19 policy responses on Canada's provinces in (almost) real time," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(S1), pages 406-445, February.
    5. Cem Cakmakli & Selva Demiralp & Sevcan Yesiltas & Muhammed Ali Yildirim, 2022. "The Sectoral Costs of the Pandemic: What is the Role of Openness?," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 72(72-2), pages 431-451, December.
    6. George, Ammu & Li, Changtai & Lim, Jing Zhi & Xie, Taojun, 2021. "From SARS to COVID-19: The evolving role of China-ASEAN production network," Economic Modelling, Elsevier, vol. 101(C).
    7. David Baqaee & Emmanuel Farhi, 2020. "Nonlinear Production Networks with an Application to the Covid-19 Crisis," NBER Working Papers 27281, National Bureau of Economic Research, Inc.
    8. Severin Reissl & Alessandro Caiani & Francesco Lamperti & Mattia Guerini & Fabio Vanni & Giorgio Fagiolo & Tommaso Ferraresi & Leonardo Ghezzi & Mauro Napoletano & Andrea Roventini, 2022. "Assessing the Economic Impact of Lockdowns in Italy: A Computational Input–Output Approach [Nonlinear Production Networks with an Application to the Covid-19 Crisis]," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(2), pages 358-409.
    9. Garriga, Carlos & Manuelli, Rody & Sanghi, Siddhartha, 2022. "Optimal management of an epidemic: Lockdown, vaccine and value of life," Journal of Economic Dynamics and Control, Elsevier, vol. 140(C).
    10. Łukasz Rachel, 2020. "An Analytical Model of Covid-19 Lockdowns," Discussion Papers 2029, Centre for Macroeconomics (CFM).
    11. David Baqaee & Emmanuel Farhi, 2022. "Supply and Demand in Disaggregated Keynesian Economies with an Application to the COVID-19 Crisis," American Economic Review, American Economic Association, vol. 112(5), pages 1397-1436, May.
    12. Pierre-Olivier Gourinchas & Ṣebnem Kalemli-Özcan & Veronika Penciakova & Nick Sander, 2021. "Fiscal Policy in the Age of COVID: Does it ‘Get in all of the Cracks?’," NBER Working Papers 29293, National Bureau of Economic Research, Inc.
    13. Abel Brodeur & David Gray & Anik Islam & Suraiya Bhuiyan, 2021. "A literature review of the economics of COVID‐19," Journal of Economic Surveys, Wiley Blackwell, vol. 35(4), pages 1007-1044, September.
    14. Brinca, Pedro & Duarte, Joao B. & Faria-e-Castro, Miguel, 2021. "Measuring labor supply and demand shocks during COVID-19," European Economic Review, Elsevier, vol. 139(C).
    15. Dizioli, Allan & Pinheiro, Roberto, 2021. "Information and inequality in the time of a pandemic," Journal of Economic Dynamics and Control, Elsevier, vol. 130(C).
    16. Lin Ma & Gil Shapira & Damien de Walque & Quy‐Toan Do & Jed Friedman & Andrei A. Levchenko, 2022. "The Intergenerational Mortality Trade‐Off Of Covid‐19 Lockdown Policies," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(3), pages 1427-1468, August.
    17. V. V. Chari & Rishabh Kirpalani & Christopher Phelan, 2021. "The Hammer and the Scalpel: On the Economics of Indiscriminate versus Targeted Isolation Policies during Pandemics," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 42, pages 1-14, October.
    18. Mitman, Kurt & Hanley, Douglas & Bognanni, Mark & Kolliner, Daniel, 2020. "Economics and Epidemics: Evidence from an Estimated Spatial Econ-SIR Model," CEPR Discussion Papers 15310, C.E.P.R. Discussion Papers.
    19. Didier, Tatiana & Huneeus, Federico & Larrain, Mauricio & Schmukler, Sergio L., 2021. "Financing firms in hibernation during the COVID-19 pandemic," Journal of Financial Stability, Elsevier, vol. 53(C).
    20. Laeven, Luc, 2022. "Pandemics, intermediate goods, and corporate valuation," Journal of International Money and Finance, Elsevier, vol. 120(C).

    More about this item

    Keywords

    Covid-19; Vaccination policy coordination; Sectoral shocks; Production networks;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • F00 - International Economics - - General - - - General
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:15710. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.