Publication Type
Working Paper
Version
publishedVersion
Publication Date
10-2020
Abstract
This paper studies optimal containment policy for combating a pandemic in an open-economy context. It does so via quantitative analyses using a model that incorporates a standard epidemiological compartmental model in a multi-country, multi-sector Ricardian model of international trade with full-fledged input-output linkages. We devise a novel approach in computing optimal national policies in the long run, and contrast these policies with a baseline in which countries maintain their current policies until vaccine availability. The welfare gains under optimal policies are asymmetric as the gains for the set of countries which should tighten up the containment measures are much larger than those which should relax. We also find that the welfare implications of optimal policies in open economies differ significantly from those in closed ones.
Keywords
COVID-19, pandemic, welfare analysis, containment policy, optimal policy, open economy, trade, input-output linkages
Discipline
International Economics | Public Health | Work, Economy and Organizations
Research Areas
Applied Microeconomics
First Page
1
Last Page
40
Publisher
SMU Economics and Statistics Working Paper Series, Paper No. 20-2020
Citation
HSU, Wen-Tai; LIN, Hsuan-Chih Luke; and YANG Han.
Between lives and economy: Optimal COVID-19 containment policy in open economies. (2020). 1-40.
Available at: https://ink.library.smu.edu.sg/soe_research/2400
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Included in
International Economics Commons, Public Health Commons, Work, Economy and Organizations Commons