Longer-Run Economic Consequences of Pandemics

Oscar Jorda, Sanjay R. Singh and Alan Taylor

No 2020-09, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: How do major pandemics affect economic activity in the medium to longer term? Is it consistent with what economic theory prescribes? Since these are rare events, historical evidence over many centuries is required. We study rates of return on assets using a dataset stretching back to the 14th century, focusing on 12 major pandemics where more than 100,000 people died. In addition, we include major armed conflicts resulting in a similarly large death toll. Significant macroeconomic after-effects of the pandemics persist for about 40 years, with real rates of return substantially depressed. In contrast, we find that wars have no such effect, indeed the opposite. This is consistent with the destruction of capital that happens in wars, but not in pandemics. Using more sparse data, we find real wages somewhat elevated following pandemics. The findings are consistent with pandemics inducing labor scarcity and/or a shift to greater precautionary savings.

Keywords: depressions; natural rates; local projections; wars; real interest rates; pandemics; COVID-19 (search for similar items in EconPapers)
JEL-codes: E43 F41 N10 N30 N40 (search for similar items in EconPapers)
Pages: 16
Date: 2020-03-26
New Economics Papers: this item is included in nep-dem, nep-his, nep-mac and nep-opm
References: Add references at CitEc
Citations: View citations in EconPapers (139)

Downloads: (external link)
https://www.frbsf.org/economic-research/files/wp2020-09.pdf Full-text PDF (application/pdf)

Related works:
Journal Article: Longer-Run Economic Consequences of Pandemics (2022)
Working Paper: Longer-run economic consequences of pandemics (2020)
Working Paper: Longer-run Economic Consequences of Pandemics (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:87696

Ordering information: This working paper can be ordered from

DOI: 10.24148/wp2020-09

Access Statistics for this paper

More papers in Working Paper Series from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().