Pandemics Depress the Economy, Public Health Interventions Do Not: Evidence from the 1918 Flu

That is a new paper by Sergio Correia, Stephan Luck, and Emil Verner, I have not read it, here is the abstract:

What are the economic consequences of an influenza pandemic? And given the pandemic, what are the economic costs and benefits of non-pharmaceutical interventions (NPI)? Using geographic variation in mortality during the 1918 Flu Pandemic in the U.S., we find that more exposed areas experience a sharp and persistent decline in economic activity. The estimates imply that the pandemic reduced manufacturing output by 18%. The downturn is driven by both supply and demand-side channels. Further, building on findings from the epidemiology literature establishing that NPIs decrease influenza mortality, we use variation in the timing and intensity of NPIs across U.S. cities to study their economic effects. We find that cities that intervened earlier and more aggressively do not perform worse and, if anything, grow faster after the pandemic is over. Our findings thus indicate that NPIs not only lower mortality; they also mitigate the adverse economic consequences of a pandemic.

Via Jason Furman.


In God we trust!

Stricter air emission standards going forward should now be seen as a public health measure not just an environmental one. People with lungs weakened by particulates end up with COPD, cardiovascular disease, and other conditions that put them at much greater risk for harm from infectious diseases like SARS-CoV-2.

A public service announcement on the dangers of smoking and vaping now and then couldn't hurt.

American amnesia, how should we even feel about them?

I'm a bit stunned. The most fiscally liberal administration in US history just spent $2,000,000,000 when the thought of this didn't occur to anybody a few months ago. Those earlier tax cuts were reckless.

"the coronavirus package could push this year’s budget deficit to $4 trillion. The largest annual deficit in U.S. history was $1.4 trillion in 2009."

Everybody knew that the "Tax Cuts for the Rich and Deficits Act of 2017" were irresponsible. Some supported them FOR that reason -- to force regressive spending cuts or regressive tax increases in the future.

What do tax cuts have to do with out of control spending?

Who would have thought that paying workers to mitigate the impact of disease spread would boost GDP!

We have had decades of economic orthodoxy holding that not paying workers to work (higher profits, profits being the part of GDP not paid to workers who produce consumption or build capital, ie, durable goods), plus government putting money in consumer pockets when the GOP controls the White House, is the means to higher GDP growth.

@mulp - you did not read the abstract correctly. In more simple words: during disease, quarantine good for economy compared to no quarantine economy, and after disease, quarantined economy outperforms non-quarantined economy, but, if no disease, disease-free economy is best.

Bonus trivia: big drop in cell phone user accounts in China, 21M; are these dead accounts? Or simply cancelled accounts? (HT: Epoch Times)

Chinese or American hegemony? What brought down the Roman empire - a pandemic or just an epidemic ?

Neither: not incorporating Germans into the elite and wasting a lot of time and effort messing around with trying to impose uniformity of belief

Yeah, but Easter. Just imagine all the full pews and queues to get into Applebee's on Sunday afternoon.

A couple questions.

Is this pandemic different from the 1918 flu in the affected demographics?

If I remember correctly, 1918 had other major changes; the war was over, so any war provisioning industries would be affected as well. What effect did that have?

Reacting early is of interest, and probably obvious, but what about over time? The pandemic lasted a while, years. How do this look if you ignore the early reactions and look at how the public health initiatives were implemented over time, with what effect?

The demographics were very different. The 1918 flu killed a lot of younger people. I imagine it had a significant effect on local work forces.

That was my understanding as well. How does that change the results?

I suspect there are lots of pension actuaries wondering if this is the way out of the pension crisis.

I don't know, but in France there are people who think that the Pandemics is a plot of the (French) government to solve its problem of paying the future pensions. Funny.

If it kills codgers a couple of years early that might help with pensions. If it's killing them a couple of weeks early it won't.

Today official COVID-19 deaths caused a 3% bump in Australia's mortality rate. In the US it was around a 25% bump. You wouldn't see those results if people were, on average, only losing a couple of weeks off their lives.

Me myself, I do begin to think that the epidemiological profile of this novel coronavirus means that everyone (everyone) WILL (if walking upon this earth) encounter the said coronavirus over the next year or two, however long it takes the virus to traverse the planet, and with whatever consequences ensue.



If people have been vaccinated, or naturally inoculated, to the virus, that might slow the progress.

Evidently, herd immunity at 50% to 60% means each new case infects less than one new case, until near eradication.

Social distancing is a bit like fighting the tide. You can put up a few walls and temporarily suspend results, and maybe that is worthy pursuit to avoid peak loads at hospitals, but in the long run I think it's a futile effort.

Interesting: "The Veterans Health Administration is America's largest integrated health care system, providing care at 1,255 health care facilities, including 170 medical centers and 1,074 outpatient sites of care of varying complexity (VHA outpatient clinics), serving 9 million enrolled Veterans each year."

VA officials keep saying they are preparing and they are ready...but they are not seeing patients yet.

Measles is chuckling at the idea of heard immunity at 50 to 60%.

Herd immunity is achieved at 1-1/R_0. If R_0 = 2.3 (Corona), this is 50-60%. If R_0 = 15 (Measles) this is >90%.

The rate of corona transmission is still uncertain, to put it mildly.

Anyone, want a toddy to kill the hegemony?

That's probably an overestimate, driven by West Coast cities that were growing faster than the national average for reasons unrelated to the Spanish flu. I suspect the effect on output was negative, but small.

Article is gated for me...

Thank you, I have escaped the toddy place. Though not sure I can still save the hegemony.

How ridiculous.

They study one pandemic and then conclude that health interventions for pandemics (plural) do not further suppress long term economic activity.

A sample size of one is not particularly useful. Especially when that pandemic killed productive healthy people while this one (for example) kills unproductive unhealthy people.

Not only that, the economy of 1918 was NOTHING like the fake fiat debt-driven stupidty-funded shit show we have today.

Talk about apples and oranges.

How about this, Herder: today's economy has the internet, where you can work from home, naked, and not waste time either commuting nor with time wasting water-cooler gossip. So yes, apples & oranges but it supports quarantine now even more so. Now get back to work, naked boy.

Bengali sweets are still good to kill the hegemony though not the savoury ones.

No need for guns now. Hegemonies can be stupid to the extent of being suicidal.

I mean, no, this doesn't tell us anything useful.

Modern day "NPIs" are putting the population under effective house arrest; Spanish flu ones were not (restrictions on crowds etc). Spanish Flu killed the young; C19 kills the elderly. It's obviously not useful.

And on this topic:

Julia Gog is a mathematician in Cambridge who did a lot of studies post-swine flu and then recently did one called Pandemic, which looked at people’s daily movements and the effects on the spread of the virus. They mathematically modelled all the data post-swine flu and looked at all the mitigations you could put in place, like closing schools and stopping sports events and making people work from home.

All of them had relatively small effects. The one thing that seemed to have a massive effect was stopping travel and saying to people you must stay home. But that is the hardest one to bring in and it has massive other consequences.

Indicating that the NPI measures enacted in the Spanish Flu days which did include house arrest probably didn't do very much.

This is not me saying the "3-14 months of house arrest argument" can't be made, or is wrong, but let's be clear that we cannot equate with measures which were far less intrusive, far less deeply reaching into the economy and of far less impact on virus spread, just cannot be equated with what is being proposed.

How do you protect your own clan?

Nap time, baby!

"Our findings thus indicate that NPIs not only lower mortality; they also mitigate the adverse economic consequences of a pandemic."

This kind of grotesque propaganda, coupled with a strong reduction of freedom, sometimes against the constitution (see this link concerning France, in French: ) leaves me sour.

When the dust is settled, some people would be very ashamed. And meanwhile, it is perhaps time to say "Mieux vaut mourir du Coronavirus que vivre à genoux".

To justify my word "grotesque", let me just say, after many other commenters, why this study is ridiculous. Obviously if you compare two numbers, "economic impact of the pandemics", "economic impact of NPIs" and find in *one* case that's the first is greater than the second, that doesn't mean logically than in a second case, the same will be true.
Especially when obviously the NPI's now are much bigger, with half the world population in home quarantine, than there were in 1919-1920, and have a magnified impact in our more globalized economy; and especially when the epidiomology of the Covid19 is so completely different from the Spanish flu, the Covid 19 killing mostly old people, with the Spanish flu killing people in their prime age. And also, the Spanish flu killed perhaps 50M people, the Covid 19 not yet 50,000 -- of course this will increase, may be a lot, there is a factor 1000 to catch up!

I'm disgusted by so much stupidity and lies. If I saw those people, and if their were not this contagion issue with Covod 19, I would
spit in their faces.

But today we have the internet and you can work remotely from home. It's unlikely a prolix complainer like you is working with their hands anyway. So back to work, Herder.

Ventilating without a ventilator?

Death has come to you, amen!

Why doesn’t Tyler take three months off from blogging to set an example? You’d think mr anti-complacency would be skeptical of gerontocratic measures but nah it’s a hedonic treadmill all the way down. If unemployment hits 30 percent cowen better hope one of those superannuated billionaires has room for him in his New Zealand hideout.

Sorry, New Zealand is not accepting visitors. One assumes that Peter Thiel is able to comfortably shelter in place, even after the realization he is worth considerably less wealthy today. And he might just be thinking of investing a bit more money in pandemic preparations than supporting any bridges between academia and politics.

Just like Switzerland wasn’t until the king of Thailand called. You’ll be sad to know that my dad’s Harvard MBA section mate’s plane landed in Wellington last night. You are a plebe not a power person.

We could accommodate him in greater Maharashtra.

With my gros cul, I can take care of le petit manu.

The least-bad option is to go back to work.

...says the man running a cattle farm in remote rural Thailand.
Ben you're a Herder who's a herder, and you probably expect, due to your remote lifestyle, to be one of those 40% free-riders that don't get infected but nevertheless enjoy herd immunity from the 60% that do get infected? Why not take a (magic) bullet for team Herd Immunity and voluntarily expose yourself to SARS-CoV-2? You have an 80% chance symptoms will be mild say the Chinese data (but a 20% chance they will not be mild and a 5% chance for severe symptoms). Me? I admire the Thai king in that German hotel with his harem.

Ray Lopez:

For your information, I braved checkpoints to make my way to Bangkok this weekend. All of Thailand is on lockdown.

For some reason, I am not worried at all about Covid -19. I am old enough but never smoked and have no comorbidities.

How is that Greek economy worlomg out?

If you work on a farm, your job is less risky than someone who has a job that is customer-facing. I wouldn't be scared either in your situation but in the latter situation I'd be scared and anybody telling me to just go to work I'd brush off like lint on my Xmas sweater.

It sounds like "if anything" may be carrying a lot of weight here.

There is always money to had finding justifications for the policies governments are already predisposed to implement. Just ask your friendly neighborhood Keynesian economist :/

Here is a far better article

Stupid article that says nothing much, and in fact implies a wrong answer (see below). You do realize that the expected loss for the example below with 99% is 0.99*$20 = $19.80? So paying $18 to avoid this loss is actually rational. The expected value for the 1% example is 20 cents, so paying $1 is irrational. But the article implies the opposite, that the $1 bet is more rational. Are you a Yahoo, Huloo? - RL

Hsee and Rottenstreich contend that when an outcome triggers strong negative emotions, people tend not to think a whole lot about the issue of probability.

Their argument is supported by their finding that for ordinary gambles involving small sums of money, people are far more sensitive to probability than in the case of electric shocks. The median person would pay $1 to avoid a 1% chance of losing $20 – and $18 to avoid a 99% chance of losing $20.

The American military experience in World War I and the influenza pandemic were closely intertwined. The war fostered influenza in the crowded conditions of military camps in the United States and in the trenches of the Western Front in Europe. The virus traveled with military personnel from camp to camp and across the Atlantic, and at the height of the American military involvement in the war, September through November 1918, influenza and pneumonia sickened 20% to 40% of U.S. Army and Navy personnel. These high morbidity rates interfered with induction and training schedules in the United States and rendered hundreds of thousands of military personnel non-effective. During the American Expeditionary Forces' campaign at Meuse-Argonne, the epidemic diverted urgently needed resources from combat support to transporting and caring for the sick and the dead. Influenza and pneumonia killed more American soldiers and sailors during the war than did enemy weapons.

In the fall of 1918, U.S. Army and Navy medical officers in camps across the country presided over the worst epidemic in American history, but the story was not new. War and disease have been linked throughout history as armies, weapons, and human pathogens have met on the battlefield. The conquistadores brought with them diseases that devastated the New World; typhus plagued Napoleon's armies; and typhoid fever humiliated the American Army during the Spanish-American War. But now U.S. Army and Navy personnel knew how to test and sanitize water supplies, vaccinate troops against typhoid and smallpox, and treat or prevent other infections. Modern bacteriology, it seemed, had tamed many diseases. Navy Surgeon General William C. Braisted proudly stated that “infectious diseases that formerly carried off their thousands, such as yellow fever, typhus, cholera, and typhoid, have all yielded to our modern knowledge of their causes and our consequent logical measures taken for their prevention.”

Number of deaths estimated to be 50 million worldwide. That is a piece of germ warfare not seen lately.

Though the general structure of all antibodies is very similar, a small region at the tip of the protein is extremely variable, allowing millions of antibodies with slightly different tip structures, or antigen-binding sites, to exist. This region is known as the hypervariable region. Each of these variants can bind to a different antigen.[2] This enormous diversity of antibody paratopes on the antigen-binding fragments allows the immune system to recognize an equally wide variety of antigens.[1] The large and diverse population of antibody paratope is generated by random recombination events of a set of gene segments that encode different antigen-binding sites (or paratopes), followed by random mutations in this area of the antibody gene, which create further diversity.[8][10] This recombinational process that produces clonal antibody paratope diversity is called V(D)J or VJ recombination. The antibody paratope is polygenic, made up of three genes, V, D, and J. Each paratope locus is also polymorphic, such that during antibody production, one allele of V, one of D, and one of J is chosen. These gene segments are then joined together using random genetic recombination to produce the paratope. The regions where the genes are randomly recombined together is the hypervariable region used to recognise different antigens on a clonal basis.
These anti-body proteins are large structures, but with that variability, there is some evolution going on, very quickly. The anti-bodies that eat virus largely survive, alien virus are like free food for them.

The vaccine plot, as I understand it now poorly) is that the anti-bodies are good at finding the unique marker for the most voracious virus. The doc then want to make another virus like product that has tat exact amino acid sequence, inject it in the patient and simulate the anti-body production.

>Our findings thus indicate that NPIs not only lower mortality; they also mitigate the adverse economic consequences of a pandemic.

I think this is almost certainly wrong. More likely is that their governance before, during and after the epidemic was relatively better.

So much speculation about unknowns... while we have a real-time experiment going on all around us. In a couple of years the record will be written and the performance of countries that took different paths can be compared.

1. The 1918 flu hit people of working age the hardest.
2. Not sure what the interventions consisted of, but did they include shutting down all "non-essential" industries?


"Schools, theaters, churches and dance halls in cities across the country were closed. Kansas City banned weddings and funerals if more than 20 people were to be in attendance. New York mandated staggered shifts at factories to reduce rush hour commuter traffic. Seattle’s mayor ordered his constituents to wear face masks. The first study found a clear correlation between the number of interventions applied and the resulting peak death rate seen. Perhaps more importantly, both studies showed that while interventions effectively mitigated the transmission of influenza virus in 1918, a critical factor in how much death rates were reduced was how soon the measures were put in place."

"The Japanese government severely restricted sea travel to and from the home islands when the pandemic struck."

"In the Pacific, American Samoa[106] and the French colony of New Caledonia[107] also succeeded in preventing even a single death from influenza through effective quarantines."

DETROIT (AP) — The coronavirus continued its unrelenting spread across the United States with fatalities doubling in two days and authorities saying Saturday that an infant who tested positive had died. It pummeled big cities like New York, Detroit, New Orleans and Chicago, and made its way, too, into rural America as hotspots erupted in small Midwestern towns and Rocky Mountain ski havens.
So I am expecting a cess pool of 15% acquiring the virus in this part of Fresno, there is a lot of movement of people in an out. That is my phase two expectation, and it is arriving. Phase three it creeps into the northern, more isolated communities in Fresno.

great article about UK's village of Eyam and how they used social distancing to fight the 1666 plague

No social distancing, just quarantine.

Eyem would be like closing off New York and letting it spread there, not putting medieval villagers in their houses for months at a time, which would've impossible.

The Black Plague also spreads completely differently. That village sealed its warrant, but it was heroic because they knew they were gonna go. Covid19 - a serious illness for perhaps 1 in 1000 people under 60 in the true infection rate - ain't gonna be like that.

Same comments as the 1st time this drivel was posted.

1. The west coast outliers likely skew the numbers. They definitely standout on the graph.

2. The interventions in 1918 were entirely different than what is being practiced today. 1918: shift work, closing gatherings greater than 50 people, wearing masks. These are tame on the economy. Today: shut everything.

The difference is stark and this paper is beyond worthless, it’s actually harmful. They need to be censored.

@Reason - what about quarantined West coast city downside? If the excerpt is accurate, they suffered less than non-quarantined East coast cities? That cannot be explained by your and Summer's hypothesis. As to your last point, today we can work from home via the Internet. So shutdown no big deal.
It's you that needs to be censored...

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