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

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  • Cem Çakmaklı
  • Selva Demiralp
  • Ṣebnem Kalemli-Özcan
  • Sevcan Yeşiltaş
  • Muhammed A. Yıldırım

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.

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  • Cem Çakmaklı & Selva Demiralp & Ṣebnem Kalemli-Özcan & Sevcan Yeşiltaş & Muhammed A. Yıldırım, 2021. "The Economic Case for Global Vaccinations: An Epidemiological Model with International Production Networks," NBER Working Papers 28395, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28395
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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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).
    6. 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.
    7. Erkmen G. Aslim & Wei Fu & Erdal Tekin & Shijun You, 2023. "From Syringes to Dishes: Improving Food Security through Vaccination," NBER Working Papers 31045, National Bureau of Economic Research, Inc.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. 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).
    13. 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.
    14. 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.
    15. L'aszl'o Czaller & GergH{o} T'oth & Bal'azs Lengyel, 2021. "Vaccine allocation to blue-collar workers," Papers 2104.04639, arXiv.org.
    16. 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).
    17. Zheng, Huanhuan, 2023. "Sovereign debt responses to the COVID-19 pandemic," Journal of International Economics, Elsevier, vol. 143(C).
    18. 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.
    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.

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    More about this item

    JEL classification:

    • F0 - International Economics - - General
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F2 - International Economics - - International Factor Movements and International Business

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