Economic Freedom and the Economic Consequences of the 1918 Pandemic

15 Pages Posted: 27 May 2020

See all articles by Jamie Bologna Pavlik

Jamie Bologna Pavlik

Texas Tech University - Department of Agricultural and Applied Economics

Vincent Geloso

George Mason University - Department of Economics

Date Written: May 22, 2020

Abstract

The Spanish flu pandemic of 1918 constituted a strong exogenous shock on economic activity that compounded that of the First World War. In this paper, we condition the economic importance of these shocks on the level of economic freedom measured by the HIEL project (Prados de la Escosura 2016) to test whether freer economies fared better. Our argument is that higher levels of economic freedom meant a greater ability to adjust to the shocks by reducing frictions in the reallocation of resources and the reorganization of economic activity. We find that countries with higher levels of economic freedom suffered less from the pandemic. We link this finding with the literature on economic freedom and crises.

Keywords: Economic freedom, 1918 flu pandemic, health, economic crises

JEL Classification: I15, N10, N30

Suggested Citation

Bologna Pavlik, Jamie and Geloso, Vincent, Economic Freedom and the Economic Consequences of the 1918 Pandemic (May 22, 2020). Available at SSRN: https://ssrn.com/abstract=3608178 or http://dx.doi.org/10.2139/ssrn.3608178

Jamie Bologna Pavlik

Texas Tech University - Department of Agricultural and Applied Economics ( email )

Suite 167, 2625 Memorial Circle
TTU Administration
Lubbock, TX 79409
United States

Vincent Geloso (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

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