Modeling of Covid-19 trade measures on essential products: a multiproduct, multicountry spatial price equilibrium framework

In this paper, we develop a unified variational inequality framework in the context of spatial price network equilibrium problems that handles multiple products with multiple demand and supply markets in multiple countries as well as multiple transportation routes. The model incorporates a plethora of distinct trade measures, which is particularly important in the pandemic, as PPEs and other essential products are in high demand, but short in supply globally. In the model, product flows as well as prices at the supply markets and the demand markets in different countries are variables that allows us to seamlessly introduce various trade measures, including tariffs, quotas, as well as price floors and ceilings. Qualitative properties are analyzed. Numerical examples are provided to illustrate the impacts of the trade measures on equilibrium product path and link flows, and on prices, and demand and supply quantities. Given the relevance of the trade measures in the world today and discussions concerning the impacts, the framework constructed in this paper is especially timely.

Automated summary

This paper introduces a unified variational inequality framework to tackle spatial price network equilibrium problems with multiple products, demand and supply markets in various countries, and transportation routes. The model incorporates different trade measures and analyzes their impacts on product paths, prices, demand, and supply quantities through qualitative analysis and numerical examples. The relevance of trade measures in today's world and discussions on their impacts make the framework constructed in this paper especially timely.