Did the great influenza of 1918-1920 trigger a reversal of the first era of globalization?

43 Pages Posted: 23 Nov 2021

See all articles by Pierre L. Siklos

Pierre L. Siklos

Wilfrid Laurier University - School of Business & Economics; Balsillie school of international affairs ; Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA)

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Date Written: November 23, 2021

Abstract

I revisit the 1918-20 pandemic and ask whether it led to a reversal in the rise of trade and financial globalization that preceded it. Using annual data for 17 countries for the 1870-1928 period, a variety of tests and techniques are used to draw some robust conclusions. Overall, the pandemic a century ago interrupted, but did not put an end, the first globalization of the 20th century. However, two blocs consisting of combatant and non-combatant countries, experienced significantly different consequences. Globalization was sharply curtailed for the combatant countries while there were few, if any, consequences for globalization in the non-combatant group of countries. That said, there was considerable resilience especially in trade openness among several of the combatant economies. Perhaps changes in the make-up of economic blocs, post-pandemic, is a fallout from shocks of this kind. While there are lessons for the ongoing COVID pandemics differences between the 1920s and today also play a role.

Keywords: Great Influenza 1918-20, globalization, openness, financial integration

JEL Classification: N10, O57, F15, F36

Suggested Citation

Siklos, Pierre L., Did the great influenza of 1918-1920 trigger a reversal of the first era of globalization? (November 23, 2021). CAMA Working Paper No. 95/2021, Available at SSRN: https://ssrn.com/abstract=3969490 or http://dx.doi.org/10.2139/ssrn.3969490

Pierre L. Siklos (Contact Author)

Wilfrid Laurier University - School of Business & Economics ( email )

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Balsillie school of international affairs ( email )

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Waterloo, ON N2L 6C2
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Australian National University (ANU) - Centre for Applied Macroeconomic Analysis (CAMA) ( email )

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