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Between Lives And Economy: Optimal Covid-19 Containment Policy In Open Economies, Wen-Tai Hsu, Hsuan-Chih Luke Lin, Yang Han

Research Collection School Of Economics

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 …