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Using past epidemics to estimate the macroeconomic implications of COVID-19: A bad idea!

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  • Donadelli, Michael
  • Ferranna, Licia
  • Gufler, Ivan
  • Paradiso, Antonio

Abstract

This work is intended to show that past epidemic scenarios are not suitable to estimate the macroeconomic impact of the new 2019 coronavirus. Using five centuries of macroeconomic data for England and a unique dataset on epidemics and other significant events (i.e., wars and natural disasters), we show that the macroeconomic effect of epidemics reflects the socio-economic features characterizing different eras. A mapping between past epidemic scenarios and the COVID-19-induced environment can thus lead to misleading outcomes. We believe our evidence to be of general interest and key for policymakers forced to implement rapid and effective policies.

Suggested Citation

  • Donadelli, Michael & Ferranna, Licia & Gufler, Ivan & Paradiso, Antonio, 2021. "Using past epidemics to estimate the macroeconomic implications of COVID-19: A bad idea!," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 214-224.
    • Handle: RePEc:eee:streco:v:57:y:2021:i:c:p:214-224
    DOI: 10.1016/j.strueco.2021.03.002
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    Cited by:

    1. António Manuel Portugal & Fatima Sol, 2022. "Macroeconomic Impacts of the Covid-19 Pandemic in Some European Union Countries: A Counterfactual Analysis," CeBER Working Papers 2022-05, Centre for Business and Economics Research (CeBER), University of Coimbra.
    2. Angelini, Elena & Damjanović, Milan & Darracq Pariès, Matthieu & Zimic, Srečko, 2023. "Modelling pandemic risks for policy analysis and forecasting," Economic Modelling, Elsevier, vol. 120(C).
    3. Cottafava, Dario & Gastaldo, Michele & Quatraro, Francesco & Santhiá, Cristina, 2022. "Modeling economic losses and greenhouse gas emissions reduction during the COVID-19 pandemic: Past, present, and future scenarios for Italy," Economic Modelling, Elsevier, vol. 110(C).
    4. Beniamino Callegari & Christophe Feder, 2022. "A Literature Review of Pandemics and Development: the Long-Term Perspective," Economics of Disasters and Climate Change, Springer, vol. 6(1), pages 183-212, March.
    5. Beniamino Callegari & Christophe Feder, 2022. "The long-term economic effects of pandemics: toward an evolutionary approach [Epidemics and trust: the case of the Spanish flu]," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(3), pages 715-735.
    6. Elżbieta Kacperska & Jakub Kraciuk, 2021. "Changes in the Stock Market of Food Industry Companies during the COVID-19 Pandemic—A Comparative Analysis of Poland and Germany," Energies, MDPI, vol. 14(23), pages 1-17, November.
    7. Carlini, Federico & Farina, Vincenzo & Gufler, Ivan & Previtali, Daniele, 2024. "Do stress and overstatement in the news affect the stock market? Evidence from COVID-19 news in The Wall Street Journal," International Review of Financial Analysis, Elsevier, vol. 93(C).

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    More about this item

    Keywords

    Epidemics; socio-economic characteristics; capitalism phases; macroeconomic scenarios;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • I10 - Health, Education, and Welfare - - Health - - - General
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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