Past Pandemics and COVID-19: Do they Impact the Economy in the Same Way?

Purpose: The aim of this article is to answer the question, whether COIVD-19 pandemic is different from a past pandemic. In the past, pandemics' death rate was a crucial driver to economic impact. Methodology: Panel data for 26 EU countries for industrial production, stringency index, economic support index, and COVID-19 death rate were assessed for significant determinants of economic activity measured by industrial production. At the first panel, estimation was conducted. Following discussion, Granger causality tests indicated links between death rate, stringency, and economic support. Findings: COVID-19 pandemic is different from previous pandemics, as the government action alters the connection between death rate and economic activity. Lockdown policy acts stronger on financial performance and later on the death rate. Practical Implications: Still, death rate is the primary driver for economic performance by influencing government decisions. Only breaking the link between cases and death rate would help to combat COVID-19. Originality/Value: The study is another one indicating vaccine rollout is crucial. But novel approaches suggest non-pharmaceutical intervention would not bring normality in the longer term, as the death rate made the government act.