Fernando Leibovici, Ana Maria Santacreu, 14 June 2020

The ongoing COVID-19 pandemic has led to a massive increase in the demand for essential medical equipment. This column discusses recent findings on the role of international trade of essential medical goods in exacerbating or mitigating the impact of a pandemic. The effects depend crucially on the countries’ trade imbalances in essential medical goods. Net importers of these goods are relatively worse off during a pandemic than net exporters. Although the welfare losses of net importers are lower in a world with high trade barriers, they benefit from reducing barriers once the pandemic arrives.

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