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Economic Freedom And The Economic Consequences Of The 1918 Pandemic

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  • Vincent Geloso
  • Jamie Bologna Pavlik

Abstract

The 1918 flu pandemic constituted an exogenous shock on economic activity. In this paper, we condition the economic importance of these shocks on the level of economic freedom measured by the Historical Index of Economic Liberty project to test whether freer economies fared better. Our argument is that higher levels of economic freedom meant a greater ability to adjust to shocks by reducing frictions in the reallocation of resources and the reorganization of economic activity. We find that higher levels of economic freedom mitigated the pandemic's effect. We link this finding with the literature on economic freedom and crises. (JEL I15, N10, N30)

Suggested Citation

  • Vincent Geloso & Jamie Bologna Pavlik, 2021. "Economic Freedom And The Economic Consequences Of The 1918 Pandemic," Contemporary Economic Policy, Western Economic Association International, vol. 39(2), pages 255-263, April.
    • Handle: RePEc:bla:coecpo:v:39:y:2021:i:2:p:255-263
    DOI: 10.1111/coep.12504
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    References listed on IDEAS

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    1. Leandro Prados De La Escosura, 2016. "Economic freedom in the long run: evidence from OECD countries (1850–2007)," Economic History Review, Economic History Society, vol. 69(2), pages 435-468, May.
    2. Robert J. Barro & Jose F. Ursua, 2008. "Macroeconomic Crises since 1870," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 255-350.
    3. repec:aei:rpaper:1008563887 is not listed on IDEAS
    4. Basco, Sergi & Domènech, Jordi & Rosés, Joan R., 2021. "The redistributive effects of pandemics: Evidence on the Spanish flu," World Development, Elsevier, vol. 141(C).
    5. Brainerd, Elizabeth & Siegler, Mark V, 2003. "The Economic Effects of the 1918 Influenza Epidemic," CEPR Discussion Papers 3791, C.E.P.R. Discussion Papers.
    6. Weil, David N., 2014. "Health and Economic Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 3, pages 623-682, Elsevier.
    7. Karlsson, Martin & Nilsson, Therese & Pichler, Stefan, 2014. "The impact of the 1918 Spanish flu epidemic on economic performance in Sweden," Journal of Health Economics, Elsevier, vol. 36(C), pages 1-19.
    8. Barro, Robert J., 2022. "Non-pharmaceutical interventions and mortality in U.S. cities during the great influenza pandemic, 1918–1919," Research in Economics, Elsevier, vol. 76(2), pages 93-106.
    9. Joshua C. Hall & Donald J. Lacombe & Timothy M. Shaughnessy, 2019. "Economic Freedom And Income Levels Across U.S. States: A Spatial Panel Data Analysis," Contemporary Economic Policy, Western Economic Association International, vol. 37(1), pages 40-49, January.
    10. Jutta Bolt & Jan Luiten Zanden, 2014. "The Maddison Project: collaborative research on historical national accounts," Economic History Review, Economic History Society, vol. 67(3), pages 627-651, August.
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    Citations

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    Cited by:

    1. Aziz N. Berdiev & Rajeev K. Goel & James W. Saunoris, 2022. "Do disease epidemics force economic activity underground? International evidence," Contemporary Economic Policy, Western Economic Association International, vol. 40(2), pages 263-282, April.
    2. Vincent Geloso & Kelly Hyde & Ilia Murtazashvili, 2022. "Pandemics, economic freedom, and institutional trade-offs," European Journal of Law and Economics, Springer, vol. 54(1), pages 37-61, August.
    3. Marson, Marta & Migheli, Matteo & Saccone, Donatella, 2023. "Free to die: Economic freedoms and influenza mortality," Economics & Human Biology, Elsevier, vol. 49(C).
    4. Marson, Marta & Migheli, Matteo & Saccone, Donatella, 2022. "Free to Die: Economic Freedoms and Influenza Mortality," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202210, University of Turin.
    5. Vytautas Kuokštis & Ringailė Kuokštytė, 2023. "How Institutions Moderated the Pandemic's Economic Impact in EU Member States," Journal of Common Market Studies, Wiley Blackwell, vol. 61(2), pages 503-525, March.
    6. Pierre L. Siklos, 2022. "Did the great influenza of 1918–1920 trigger a reversal of the first era of globalization?," International Economics and Economic Policy, Springer, vol. 19(3), pages 459-490, July.
    7. Glenn L. Furton, 2023. "The pox of politics: Troesken’s tradeoff reexamined," Public Choice, Springer, vol. 195(1), pages 169-191, April.
    8. Byron B. Carson, 2022. "Individuals and Externalities in Economic Epidemiology: A Tension and Synthesis," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 37(Fall 2022), pages 1-24.
    9. Byron Carson, 2024. "Prevention externalities: private and public responses to the 1878 yellow fever epidemic," Public Choice, Springer, vol. 201(3), pages 579-606, December.
    10. Justin T. Callais & Jamie Bologna Pavlik, 2023. "Does economic freedom lighten the blow? Evidence from the great recession in the United States," Economics of Governance, Springer, vol. 24(3), pages 357-398, September.

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    More about this item

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative

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