lukas-jue / 1918-flu-pandemic

Research Paper: Economic Consequences of the 1918 Flu Pandemic: Reviewing Evidence from the Historical Precedent of Covid-19

Economic Consequences of the 1918 Flu Pandemic: Reviewing Evidence from the Historical Precedent of Covid-19

About the Paper

This short term paper was written in summer 2020 within the first-year PhD course Historical and Normative Foundations of Economics at the Graduate School of Economics, Finance, and Management at Goethe University in Frankfurt, Germany. Read the full paper here:

Economic Consequences of the 1918 Flu Pandemic: Reviewing Evidence from the Historical Precedent of Covid-19

Abstract

Discussions of the Covid-19-induced health and economic crises often feature the adjective unprecedented. However, there exists historical precedent: The 1918 flu pandemic. By examining existing literature on its economic effects, this paper first highlights a consensus that most indicators (GDP, consumption, poverty rates, capital income) were worsening as a result of the 1918 flu pandemic, possibly except for increased wages due to a labor supply shock. However, estimates vary largely by study and evidence remains inconclusive. This paper secondly discusses similarities and differences between the 1918 flu pandemic and Covid-19. I conclude that a direct projection from 1918 to 2020 is difficult and economic predictions based on the historical event might be imprecise. The main reasons are an unusually high mortality rate in 1918–19 of prime working age individuals, and vastly different economic, medical, and societal conditions.