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The long-run effects of pandemics on inflation: Will this time be different?

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  • Bonam, Dennis
  • Smădu, Andra

Abstract

We find that past major pandemics have led to a significant decline in trend inflation in Europe that lasts for more than a decade. The effects of the COVID-19 pandemic on trend inflation could, however, be different this time around.

Suggested Citation

  • Bonam, Dennis & Smădu, Andra, 2021. "The long-run effects of pandemics on inflation: Will this time be different?," Economics Letters, Elsevier, vol. 208(C).
    • Handle: RePEc:eee:ecolet:v:208:y:2021:i:c:s0165176521003426
    DOI: 10.1016/j.econlet.2021.110065
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    References listed on IDEAS

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    1. Martin S Eichenbaum & Sergio Rebelo & Mathias Trabandt, 2021. "The Macroeconomics of Epidemics [Economic activity and the spread of viral diseases: Evidence from high frequency data]," Review of Financial Studies, Society for Financial Studies, vol. 34(11), pages 5149-5187.
    2. Eichenbaum, Martin S. & Rebelo, Sergio & Trabandt, Mathias, 2022. "Epidemics in the New Keynesian model," Journal of Economic Dynamics and Control, Elsevier, vol. 140(C).
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    Cited by:

    1. Dominika Gajdosikova & Katarina Valaskova & Tomas Kliestik & Veronika Machova, 2022. "COVID-19 Pandemic and Its Impact on Challenges in the Construction Sector: A Case Study of Slovak Enterprises," Mathematics, MDPI, vol. 10(17), pages 1-20, September.
    2. Lahlou, Kamal & Bennouna , Hicham, 2022. "Contributions des facteurs domestiques et externes à la dynamique de l’inflation au Maroc," Document de travail 2022-1, Bank Al-Maghrib, Département de la Recherche.
    3. Khalil Ullah Mohammad & Mohsin Raza Khan, 2021. "Bank Capital Structure Dynamics and Covid-19: Evidence from South Asia," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 3(3), pages 293-304, December.
    4. Olegs Krasnopjorovs, 2022. "Whether Low-Income Households and Retirees Face Higher Inflation? Evidence from Latvia," Post-Print hal-03861129, HAL.

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    More about this item

    Keywords

    Pandemics; Inflation; Local projections;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • I10 - Health, Education, and Welfare - - Health - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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