In Preparing for a Pandemic, (forthcoming AER PP), on my own and a bunch of worthies together with Susan Athey, Eric Budish, Canice Prendergast, Scott Duke Kominers, Michael Kremer and others equally worthy, we clarify the mannequin that we’ve been utilizing to estimate the worth of vaccines and to advise governments. The center of the paper is the appendix however the paper offers a good overview. Based mostly on our mannequin, we suggested governments to go massive and we had some success however in all places we went we have been confronted with sticker shock. We advisable that even poor international locations purchase vaccines prematurely and that high-income international locations make giant investments in vaccine capability of $100b or extra in complete.
It’s now apparent that we should always have spent extra however the magnitudes are nonetheless astounding. The world spent on the order of $20b or so on vaccines and obtained a return within the trillions! It was exhausting to get governments to spend billions on vaccines regardless of huge benefit-to-cost ratios but world spending on fiscal help was $14 trillion! Even now, there’s extra to be finished to vaccinate the world shortly, however nonetheless we hesitate.
I went over the mannequin for Jess Hoel’s class and we additionally had a spirited dialogue of First Doses First and different insurance policies to stretch the vaccine provide.