The aim of this paper is to shed light on the economic and epidemiological trade-offs that emerge when choosing between different vaccination strategies. For that purpose we employ a setting with three age groups that differ with respect to their fatality rates. The model also accounts for heterogeneity in the transmission rates between and within these age groups. We compare the results for two different contact patterns, in terms of the total number of deceased, the total number of infected, the peak infection rate and the economic gains from different vaccination strategies. We find that fatalities are minimized by first vaccinating the elderly, except when vaccination is slow and the general transmission rate is relatively low. In this case deaths are minimized by first vaccinating the group that is mainly responsible for spreading of the virus. With regard to the other outcome variables it is best to vaccinate the group that drives the pandemic first. A trade-off may therefore emerge between reducing fatalities on the one hand and lowering the number of infected as well as maximizing the economic gains from vaccinations on the other hand.

We explore how importing of intermediate goods affects the carbon intensity of firms in the Swedish manufacturing sector. By exploiting exogenous shocks to foreign export supply of intermediate goods, we estimate that a 10 percent increase in imports causes a 5.6 percent reduction in carbon intensity. Average carbon intensity among the firms in our sample between 2004 and 2016 decreased by around 50 percent, and our results suggest that import growth accounted for about a third of this decline. Exploring the mechanisms, we find evidence for both a technique effect and a product composition effect. Importing has a positive impact on productivity, scale of production, and abatement investments. It also encourages firms to focus more on their core products. We find no evidence for a pollution haven effect.

Clusters in the developing world do, to a large extent, attract low-educated individuals, and these clusters are in some cases, characterized by urbanization without industrialization. This contrasts starkly to clusters in advanced economies that attract high-skilled individuals and entrepreneurs. In this paper, we develop a model of agglomeration and spatial sorting that is consistent with these two types of different agglomeration processes in developed and developing countries. We show that a poor country that has an agglomeration with low skilled individuals, may get stuck in this equilibrium, but that free mobility of human capital from the outset nevertheless is superior from the perspective of total social welfare.

Globalization and robotics (globotics) are jointly transforming the world economy at an explosive pace. While much of the literature has focused on rich nations, the changes are quite likely to affect developing nations in important ways. The premise of the paper - which should be regarded as a thought-piece - is based on an extreme thought experiment. What does development look like when digital technology has rendered manufacturing jobless and many services freely traded? Our conclusion is that the service-led development path may become the norm rather than the exception; think India, not China. Since success in the service sector is based on quite different factors than success in manufacturing, development strategies and mindsets may have to change. This is an optimistic conclusion since it suggests that developing nations can directly export the source of their comparative advantage - low-cost labour - without having first to make goods with that labour.

In this paper we study how trade liberalization affects the location and the product scope of firms. We find that the largest and most productive multi-product firms concentrate to the larger market as a result of trade liberalization. In the presence of relocation costs, we also find that these firms will expand their product scope in the larger market while firms in the smaller market will contract their product scope or expand it to a smaller degree. The adjustment of firms’ product scope can therefore be a substitute for firm relocation, and the cost of introducing new varieties becomes an important parameter, that influences the degree of agglomeration.

This paper develops a simple model of spatial sorting where the least productive entrepreneurs are drawn to the large core region. This is an unusual feature. The literature on spatial sorting typically shows how the most productive individuals and firms agglomerate to the core. However, our model is consistent with empirical evidence that reveals that large agglomerations also attract the low skilled.

This paper analyzes the epidemiological and economic effects of quarantines. We use a basic epidemiological model, a SEIR-model, that is calibrated to roughly resemble the COVID-19 pandemic, and we assume that individuals that become infected or are isolated on average lose a share of their productivity. An early quarantine postpones but does not alter the course of the pandemic at a cost that increases in the duration and the extent of the quarantine. For quarantines at later stages of the pandemic there is a trade-off between lowering the peak level of infectious people on the one hand and minimizing fatalities and economic losses on the other hand. A longer quarantine dampens the peak level of infectious people and also reduces the total number of infected persons but increases economic losses. Both the peak level of infectious individuals and the total share of the population that will have been infected are U-shaped in relation to the share of the population in quarantine, while economic costs increase in this share. In particular, a quarantine covering a moderate share of the population leads to a lower peak, fewer deaths and lower economic costs, but it implies that the peak of the pandemic occurs earlier.

Control over borders and access to the common market were key issues in the Brexit negotiations concerning the UK's future relationship with the European Union (EU). The parties have expressed strong political commitments regarding both issues. We explore a sequential model, which allows us to analyze the effects of these commitments. It is assumed that the UK controls labor mobility, and that the EU can constrain trade to dissuade future secession, or to punish the UK. We find that the EU has an incentive to claim trade and mobility to be inseparable freedoms whether that reflects its true preferences or not. Our model also implies that both parties are better off if the UK commits to a mobility policy first. Moreover, UK contributions to the EU budget can substitute for trade restriction and allow for a more efficient outcome. Finally, while the EU lacks bargaining power without a readiness to impose trade restrictions, a stronger will to punish the UK does not affect mobility but harms trade. Hence, fueling resentment about Brexit does not benefit the EU.

This paper models the current pandemic to analyze vaccination strategies in a setting with three age groups that differ with respect to their fatality rates. The model also accounts for heterogeneity in the transmission rates between and within these age groups. We compare the outcomes in terms of the total number of deceased, the total number of infected, the peak infection rate and the economic consequences. We find that fatalities are almost always minimized by first vaccinating the elderly, except when vaccination is slow and the general transmission rate is relatively low. In this case deaths are minimized by first vaccinating the middle-aged as this group is responsible for substantial spreading of the virus to the elderly. With regard to the other outcome variables it is always best to vaccinate the middle-aged group first. A trade-off may therefore emerge between reducing fatalities on the one hand and lowering the number of infected as well as maximizing the economic gains from vaccinations on the other hand.