Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/241249 
Year of Publication: 
2021
Series/Report no.: 
Bank of Canada Staff Working Paper No. 2021-26
Publisher: 
Bank of Canada, Ottawa
Abstract: 
How does interconnectedness affect the course of a pandemic? What are the optimal withinand between-state containment policies? We embed a spatial SIR model into a multi-sector quantitative trade model. We calibrate it to US states and the COVID-19 pandemic and find that interconnectedness increases the death toll by 146,200 lives. A local within-state containment policy minimizes welfare losses relative to a national policy or to one that reduces mobility between states. The optimal policy combines local within- and betweenstate restrictions and saves 289,300 lives. This optimal policy induces a peak reduction in mobility of 25.97% that saves approximately 23% more lives. Different timing of policies across states is key to minimizing losses. States like South Carolina might have imposed internal lockdowns too early but travel restrictions too late.
Subjects: 
Coronavirus disease (COVID-19)
Economic models
Regional economic developments
JEL: 
F1
H0
I1
R1
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.