We analyze infectious diseases in a general equilibrium model with endogenous mobility, where forward-looking agents weigh disease risks against economic opportunities in cross-regional mobility decisions. This generates ?self-containment? and ?self-healing? mobility responses to regional differences in healthcare and prevalence. Applied to US COVID-19 data, our model reveals that cross-state mobility restrictions curbed infections by reducing cross-regional contacts but increased deaths and output losses by hindering mobility toward regions with better recovery outcomes. Relative to a model with exogenous mobility, our framework predicts fewer infections, lower mortality, and higher economic output following the unanticipated pandemic shock.

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1 August 2026

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Journal of International Economics 1622026

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DOI: 10.1016/j.jinteco.2026.104298

https://www.sciencedirect.com/science/article/pii/S0022199626000887?via%3Dihub

This Journal article is published under the centre's Trade programme.