Globalization and Pandemics
American Economic Review
vol. 113,
no. 4, April 2023
(pp. 939-81)
Abstract
We provide theory and evidence on the relationship between globalization and pandemics. Business travel facilitates trade and travel leads to human interactions that transmit disease. Trade-motivated travel generates an epidemiological externality across countries. If infections lead to deaths, or reduce individual labor supply, we establish a general equilibrium social distancing effect, whereby increases in relative prices in unhealthy countries reduce travel to those countries. If agents internalize the threat of infection, we show that their behavioral responses lead to a reduction in travel that is larger for higher-trade-cost locations, which initially reduces the ratio of trade to output.Citation
Antràs, Pol, Stephen J. Redding, and Esteban Rossi-Hansberg. 2023. "Globalization and Pandemics." American Economic Review, 113 (4): 939-81. DOI: 10.1257/aer.20201479Additional Materials
JEL Classification
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- F14 Empirical Studies of Trade
- F60 Economic Impacts of Globalization: General
- I12 Health Behavior
- N30 Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: General, International, or Comparative
- N70 Economic History: Transport, International and Domestic Trade, Energy, Technology, and Other Services: General, International, or Comparative
- Z31 Tourism: Industry Studies