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GDP Effects of Pandemics: A Historical Perspective

Author

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  • Maciej Stefański

Abstract

The paper estimates dynamic effects of pandemics on GDP per capita with local projections, controlling for the effects of wars and weather conditions, using a novel dataset that covers 33 countries and stretches back to the 13th century. Pandemics are found to have prolonged and highly statistically significant effects on GDP per capita - a pandemic killing 1% of the population tends to increase GDP per capita by approx. 0.3% after about 20 years. The results are qualitatively robust to various model specifications, geographical division of the sample and an exclusion of extreme events such as the Black Death and the New World epidemics. The effects of pandemics differ from those of wars and weather, which are negative and die out quicker, in line with the neoclassical growth model.

Suggested Citation

  • Maciej Stefański, 2020. "GDP Effects of Pandemics: A Historical Perspective," KAE Working Papers 2020-057, Warsaw School of Economics, Collegium of Economic Analysis.
    • Handle: RePEc:sgh:kaewps:2020057
    as

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    File URL: http://kolegia.sgh.waw.pl/pl/KAE/Documents/WorkingPapersKAE/WPKAE_2020_057.pdf
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    References listed on IDEAS

    as
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    5. Malanima, Paolo, 2011. "The long decline of a leading economy: GDP in central and northern Italy, 1300–1913," European Review of Economic History, Cambridge University Press, vol. 15(2), pages 169-219, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    pandemic; GDP; local projection; economic history; war; tree rings;
    All these keywords.

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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