DP15710 The Economic Case for Global Vaccinations: An Epidemiological Model with International Production Networks

Author(s): Cem Cakmakli, Selva Demiralp, Sebnem Kalemli-Ozcan, Sevcan Yesiltas, Muhammed Yildirim
Publication Date: January 2021
Programme Areas: International Macroeconomics and Finance, Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15710

COVID-19 pandemic had a devastating effect on both lives and livelihoods in 2020. The ar-rival of effective vaccines can be a major game changer. However, vaccines are in short supply as of early 2021 and most of them are reserved for the advanced economies. We show that the global GDP loss of not inoculating all the countries, relative to a counterfactual of global vaccinations, is higher than the cost of manufacturing and distributing vaccines globally. We use an economic-epidemiological model of international production and trade networks and calibrate the model to 65 countries. Our estimates suggest that up to 49 percent of the global economic costs of the pan-demic in 2021 are borne by the advanced economies even if they achieve universal vaccination in their own countries.