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Influenza Pandemics and Macroeconomic Fluctuations in Recent Economic History

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  • Fraser Summerfield
  • Livio Di Matteo

Abstract

COVID-19 and the associated economic disruption is not a unique pairing. Catastrophic health events including the Black Death and the Spanish Flu also featured major economic disruptions. This paper focuses on significant health shocks during 1870-2016 from a singular virus: influenza. Our analysis builds on a literature dominated by long-run analyses by documenting the causal impact of influenza pandemics on short-run macroeconomic fluctuations. We examine 16 developed economies combining the Jorda-Schularick-Taylor Macro History Database with the Human Mortality Database. Our results reveal important negative impacts. Further, we illustrate that these effects operate through different channels over time. Prior to vaccines, pandemic-induced mortality was responsible for economic contractions while modern flu-induced cycles appear to arise because of pandemic-induced consumption decreases.

Suggested Citation

  • Fraser Summerfield & Livio Di Matteo, 2021. "Influenza Pandemics and Macroeconomic Fluctuations in Recent Economic History," Working Papers 210002, Canadian Centre for Health Economics.
    • Handle: RePEc:cch:wpaper:210002
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    More about this item

    Keywords

    Pandemics; Business Cycles; Mortality; Consumption; GDP Fluctuations;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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