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What Happened to the U.S. Economy during the 1918 Influenza Pandemic? A View Through High-Frequency Data

Published online by Cambridge University Press:  21 February 2022

François R. Velde Open the ORCID record for François R. Velde [Opens in a new window]
François R. Velde*
Affiliation:
Senior Economist and Economic Advisor, Federal Reserve Bank of Chicago, Research Department, 230 S LaSalle St, Chicago, IL 60604. E-mail: [email protected].
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Abstract

An economic downturn coincided with the start of the epidemic but the recession was short and moderate, compared with that of 1920/21. Cross-sectional high-frequency data indicate that the epidemic affected the labor supply sharply but briefly with no ensuing spill-overs; most of the recession, brief as it was, was due to the end of the war. I analyze weekly city-level mortality data and economic indicators with time series methods and structural estimation of an economic-epidemiological model: interventions to hinder the contagion reduced mortality at little economic cost, probably because reduced infections mitigated the impact on the labor force.

Type
Article
Information
The Journal of Economic History , Volume 82 , Issue 1 , March 2022 , pp. 284 - 326
Copyright
© The Economic History Association 2022

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Footnotes

The views presented here do not necessarily reflect those of the Federal Reserve of Chicago or the Federal Reserve System. I thank without implicating Gadi Barlevy, Jeff Campbell, Nicolas Crouzet, and François Gourio for very helpful discussions; participants at the European Macro History Online Seminar and the HeLP! seminar for their comments; Chris de Mena for gallant service beyond the call of duty; Matthew Song and Richard deThorpe for outstanding research assistance; and two referees for their constructive comments.

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