Longer-Run Economic Consequences of Pandemics

2020-09 | June 30, 2020

What are the medium- to long-term effects of pandemics? How do they differ from other economic disasters? We study major pandemics using the rates of return on assets stretching back to the 14th century. Significant macroeconomic after-effects of pandemics persist for decades, with real rates of return substantially depressed, in stark contrast to what happens after wars. Our findings are consistent with the neoclassical growth model: capital is destroyed in wars, but not in pandemics; pandemics instead may induce relative labor scarcity and/or a shift to greater precautionary savings.

Article Citation

Taylor, Alan M., Oscar Jorda, and Sanjay R. Singh. 2020. “Longer-Run Economic Consequences of Pandemics,” Federal Reserve Bank of San Francisco Working Paper 2020-09. Available at https://doi.org/10.24148/wp2020-09

About the Authors
Òscar Jordà
Òscar Jordà is a senior policy advisor in the Economic Research Department of the Federal Reserve Bank of San Francisco. Learn more about Òscar Jordà
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Sanjay R. Singh is a senior economist in the Economic Research Department of the Federal Reserve Bank of San Francisco. Learn more about Sanjay R. Singh