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Pigovian Export Promotion and Cooperation in a Pandemic

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  • Gerda Dewit

    (Department of Economics, Finance and Accounting, Maynooth University.)

  • Dermot Leahy

    (Department of Economics, Finance and Accounting, Maynooth University.)

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

Suggested Citation

  • Gerda Dewit & Dermot Leahy, 2022. "Pigovian Export Promotion and Cooperation in a Pandemic," Economics Department Working Paper Series n317-22.pdf, Department of Economics, National University of Ireland - Maynooth.
    • Handle: RePEc:may:mayecw:n317-22.pdf
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    More about this item

    Keywords

    Cooperative and non-cooperative trade policy; Export promotion; Global externality; Global welfare; Pigovian subsidies;
    All these keywords.

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