Globalization and Pandemics

Miércoles 28/10, 17h

Presentado por Esteban Rossi-Hansberg
Paper Abstract

We develop a model of human interaction to analyze the relationship between globalization and pandemics. Our framework provides joint microfoundations for the gravity equation for international trade and the Susceptible-Infected-Recovered (SIR) model of disease dynamics. We show that there are cross-country epidemiological externalities, such that whether a global pandemic breaks out depends critically on the disease environment in the country with the highest rates of domestic infection. A deepening of global integration can either increase or decrease the range of parameters for which a pandemic occurs, and can generate multiple waves of infection when a single wave would otherwise occur in the closed economy. If agents do not internalize the threat of infection, larger deaths in a more unhealthy country raise its relative wage, thus generating a form of general equilibrium social distancing. Once agents internalize the threat of infection, the more unhealthy country typically experiences a reduction in its relative wage through individual-level social distancing. Incorporating these individual-level responses is central to generating large reductions in the ratio of trade to output and implies that the pandemic has substantial effects on aggregate welfare, through both deaths and reduced gains from trade.

Jointly written with Pol Antrás and Stephen J. Redding 

Esteban Rossi-Hansberg
Esteban Rossi-Hansberg is the Theodore A. Well ’29 Professor of Economics at Princeton University, where he has been since 2005. Prior to Princeton he was an Assistant Professor at Stanford University. He graduated from the University of Chicago in 2002. His research specializes in international trade, regional and urban economics, as well as growth and organizational economics. He has published extensively in all the major journals in economics. In 2007 he received the Alfred Sloan Research Fellowship and in 2010 he received the August Lösch Prize and the Geoffrey Hewings Award. He is a member of the NBER and CEPR and is, or has been, an associate editor of the Quarterly Journal of Economics, the American Economic Review, the Journal of Monetary Economics and the Journal of Urban Economics, among other journals.

Zoom Meeting 
https://utdt.zoom.us/j/92130545284

Lugar: Zoom Meeting
Contacto: Cecilia Lafuente