The Macroeconomic Impact of the 1918–19 Influenza Pandemic in Sweden

Martin Karlsson, Matvieiev Mykhailo () and Maksym Obrizan
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Matvieiev Mykhailo: Aix-Marseille School of Economics, 5-9 Bd Maurice Bourdet, 13001 Marseille, France

The B.E. Journal of Macroeconomics, 2023, vol. 23, issue 2, 637-675

Abstract: In this paper, we develop an overlapping generations model with endogenous fertility and calibrate it to the Swedish historical data in order to estimate the economic cost of the 1918–19 influenza pandemic. The model identifies survivors from younger cohorts as main benefactors of the windfall bequests following the influenza mortality shock. We also show that the general equilibrium effects of the pandemic reveal themselves over the wage channel rather than the interest rate, fertility or labor supply channels. Finally, we demonstrate that the influenza mortality shock becomes persistent, driving the aggregate variables to lower steady states which costs the economy 1.819% of the output loss over the next century.

Keywords: epidemics; overlapping generations models; 1918–19 influenza; endogenous fertility (search for similar items in EconPapers)
JEL-codes: E21 I15 (search for similar items in EconPapers)
Date: 2023
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Related works:
Working Paper: The Macroeconomic Impact of the 1918–19 Influenza Pandemic in Sweden (2022)
Working Paper: The Macroeconomic Impact of the 1918–19 Influenza Pandemic in Sweden (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejmac:v:23:y:2023:i:2:p:637-675:n:2

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DOI: 10.1515/bejm-2021-0018

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