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

73 Pages Posted: 27 Jan 2021 Last revised: 1 Feb 2023

See all articles by Cem Cakmakli

Cem Cakmakli

Koc University - Department of Economics

Selva Demiralp

Koc University - Department of Economics

Ṣebnem Kalemli-Özcan

University of Maryland

Sevcan Yesiltas

Koc University

MA Yildirim

Koc University

Multiple version iconThere are 2 versions of this paper

Date Written: January 2021

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

Cakmakli, Cem and Demiralp, Selva and Kalemli-Özcan, Ṣebnem and Yesiltas, Sevcan and Yildirim, MA, The Economic Case for Global Vaccinations: An Epidemiological Model with International Production Networks (January 2021). NBER Working Paper No. w28395, Available at SSRN: https://ssrn.com/abstract=3772642

Cem Cakmakli (Contact Author)

Koc University - Department of Economics ( email )

Rumeli Feneri Yolu
Sariyer 80910, Istanbul
Turkey

Selva Demiralp

Koc University - Department of Economics ( email )

Rumeli Feneri Yolu
Sariyer 80910 Istanbul
Turkey
+212 338 1842 (Phone)

Ṣebnem Kalemli-Özcan

University of Maryland ( email )

College Park
College Park, MD 20742
United States

Sevcan Yesiltas

Koc University ( email )

Rumelifeneri Yolu
34450 Sar?yer
Istanbul, 34450
Turkey

MA Yildirim

Koc University

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