This paper develops a discrete‐time epidemiological model to characterize the spread of economic deterioration across sectors in the United States for the period 1952–2015. It is the first model to apply an epidemiological approach to consider such spread using macroeconomic Flow of Funds data. By extending the usual one‐period Markov model to a two‐period setting, we incorporate the possibility that an initial slow growth period may either continue further or improve such that further economic deterioration is averted. The estimated model can be used to classify more versus less contagious sectors and identify their channels of transmission.

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For many developing countries, historical inflation figures are rarely available. We propose a simple method that aims to recover such figures of inflation using prices of postage stamps issued in earlier years. We illustrate our method for Suriname, where annual inflation rates are available for 1961 until 2015, and where fluctuations in inflation rates are prominent. We estimate the inflation rates for the sample 1873 to 1960. Our main finding is that high inflation periods usually last no longer than 2 or 3 years. An Exponential Generalized Autoregressive Conditional Heteroscedasticity (EGARCH) model for the recent sample and for the full sample with the recovered inflation rates shows the relevance of adding the recovered data.

This paper develops a discrete-time epidemiological model for the spread of crises across sectors in the United States for the period 1952-2015. It is the first to use an epidemiological approach with macroeconomic (Flow of Funds) data. An extension of the usual one-period Markov model to a two-period setting incorporates the concept of downturns that may either precede a crisis or from which the sector may recover and avert a crisis. The results indicate that the nonfinancial business and private depository institutions & money market mutual funds sectors are highly contagious while the monetary authority is the least contagious.