Pandemics Depress the Economy, Public Health Interventions Do Not: Evidence from the 1918 Flu

124 Pages Posted: 3 Aug 2022 Last revised: 9 Jun 2022

See all articles by Sergio Correia

Sergio Correia

Federal Reserve Banks - Federal Reserve Bank of Richmond

Stephan Luck

Federal Reserve Bank of New York

Emil Verner

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: June 5, 2020

Abstract

We study the impact of non-pharmaceutical interventions (NPIs) on mortality and economic activity across U.S. cities during the 1918 Flu Pandemic. The combination of fast and stringent NPIs reduced peak mortality by 50% and cumulative excess mortality by 24% to 34%. However, while the pandemic itself was associated with short-run economic disruptions, we find that these disruptions were similar across cities with strict and lenient NPIs. NPIs also did not worsen medium-run economic outcomes. Our findings indicate that NPIs can reduce disease transmission without further depressing economic activity, a finding also reflected in discussions in contemporary newspapers.

Note:
Funding Information: No funding or grant has been received for conducting the study.

Conflict of Interests: I declare no competing interest.

Keywords: 1918 Flu Pandemic, non-pharmaceutical interventions (NPI), real economy

JEL Classification: I10, I18, E32, H1

Suggested Citation

Correia, Sergio and Luck, Stephan and Verner, Emil, Pandemics Depress the Economy, Public Health Interventions Do Not: Evidence from the 1918 Flu (June 5, 2020). Available at SSRN: https://ssrn.com/abstract=3561560 or http://dx.doi.org/10.2139/ssrn.3561560

Sergio Correia

Federal Reserve Banks - Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

HOME PAGE: http://scorreia.com

Stephan Luck

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Emil Verner (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

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