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

Bates College; University of Western Ontario - King's University College

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 )

Box 42132
Lubbock, TX 79409-2132
United States

Vincent Geloso (Contact Author)

Bates College ( email )

Department of Economics
Lewiston, ME
United States

University of Western Ontario - King's University College ( email )

266 Epworth Avenue
London, Ontario N6A 2M3
Canada

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