Longer-run economic consequences of pandemics

Alan Taylor, Oscar Jorda and Sanjay Singh

No 14543, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: What are the medium- to long-term effects of pandemics? How do they differ from other economic disasters? We study major pandemics using the rates of return on assets stretching back to the 14th century. Significant macroeconomic after-effects of pandemics persist for about decades, with real rates of return substantially depressed, in stark contrast to what happens after wars. Our findings are consistent with the neoclassical growth model: capital is destroyed in wars, but not in pandemics; pandemics instead may induce relative labor scarcity and/or a shift to greater precautionary savings.

Keywords: Pandemics; Wars; Depressions; Real interest rate; Natural rate; Local projections (search for similar items in EconPapers)
JEL-codes: E43 F41 I10 N10 N30 N40 O40 (search for similar items in EconPapers)
Date: 2020-03
New Economics Papers: this item is included in nep-gro, nep-his and nep-mac
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Citations: View citations in EconPapers (221)

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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)
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