The Coronavirus and the Great Influenza Pandemic: Lessons from the “Spanish Flu” for the Coronavirus’s Potential Effects on Mortality and Economic Activity

Barro, Robert J.; Ursúa, José F.; Weng, Joanna

doi:10.3386/w26866

Cited by 717 publications

(677 citation statements)

References 7 publications

Supporting

Mentioning

641

Contrasting

Unclassified

Order By: Relevance

“…We adopt a variation in the SIR epidemiology model reviewed and proposed by Atkeson (2020) andNeumeyer (2020) to analyze the optimal lockdown policy. Our aim is to contribute to the ongoing discussion on the optimal policy response to the COVID shock, see Barro, Ursua, and Weng (2020); Eichenbaum, Rebelo, and Trabandtz (2020) ;Hall, Jones, and Klenow (2020); Dewatripont et al (2020); Piguillem and Shi (2020); Jones, Philippon, and Venkateswaran (2020) and the contributions in the volume by Baldwin and Weder (2020).…”

Section: Introduction and Overviewmentioning

confidence: 99%

A Simple Planning Problem for COVID-19 Lockdown

2020

View full text Add to dashboard Cite

We study the optimal lockdown policy for a planner who wants to control the fatalities of a pandemic while minimizing the output costs of the lockdown. We use the SIR epidemiology model and a linear economy to formalize the planner's dynamic control problem. The optimal policy depends on the fraction of infected and susceptible in the population. We parametrize the model using data on the COVID19 pandemic and the economic breadth of the lockdown. The quantitative analysis identifies the features that shape the intensity and duration of the optimal lockdown policy. Our baseline parametrization is conditional on a 1% of infected agents at the outbreak, no cure for the disease, and the possibility of testing. The optimal policy prescribes a severe lockdown beginning two weeks after the outbreak, covers 60% of the population after a month, and is gradually withdrawn covering 20% of the population after 3 months. The intensity of the lockdown depends on the gradient of the fatality rate as a function of the infected, and on the assumed value of a statistical life. The absence of testing increases the economic costs of the lockdown, and shortens the duration of the optimal lockdown which ends more abruptly. Welfare under the optimal policy with testing is higher, equivalent to a one-time payment of 2% of GDP.

show abstract

Section: Introduction and Overviewmentioning

confidence: 99%

A Simple Planning Problem for COVID-19 Lockdown

2020

View full text Add to dashboard Cite

show abstract

“…McKibbin and Fernando, 2020, conclude that the scale of costs could be avoided by investing in public health systems in less developed economies. A conventional influenza epidemic panel-regression analysis of 43 countries reveals an economic and consumption decline of 6% and 8%, respectively (Barro et al, 2020). Weng 2016 uses GDP and consumption growth rates as dependent variables, while flu death rates and their 1 st and 2 nd lags as independent variables, making an analogy of Spanish influenza with 2008-2009 global Great Recession, predicting an economic dislocation.…”

Section: Literaturementioning

confidence: 99%

The Macroeconomic Effects of COVID-19 in Montenegro: A Bayesian VAR Approach

Djurovic

Bojaj

2020

Preprint

View full text Add to dashboard Cite

The outbreak of COVID-19 has faced the globe with economic upheaval. The research problem of this paper focuses on examining, diagnosing, and assessing appropriate macroprudential policy response of the Montenegrin government to the evolution of the pandemic disease. We explore three economic scenarios – shocks – of how the pandemic disease might impact the economy of Montenegro in the dawn of entering the European Union. We forecast a sustainable GDP growth model from January 2006 until December 2017. Deterministic-static simulation solution model – the baseline – is employed, adding sensitivity scenarios – shocks – from January 2018 until Jun 2018, respectively, from -10% until -60%. Thus, we observe what happens to GDP, capital stock, human capital, and employment. The model measures econometrically the macroeconomic costs, using Bayesian VAR independent Normal-Wishart prior, of the pandemic disease in terms of demand and supply lost due to illness and closed activities in the GDP growth in various pandemic scenarios. The supply side is hit severely through employment and human capital, while the demand through the capital stock. The measures, focused on securing employment and keeping highly qualified staff in Montenegro’s companies are justified public finance spending.The results show a toll on the GDP, employment, capital stock, and especially human capital for 2018. Still, most likely, fast recovery of GDP growth is predicted in 2019 in case macroprudential policymakers make an appropriate fiscal and monetary combination puzzle.

show abstract

“…investment in public health measures related to prevention, suppression, mitigation, and/or cure. The exercise also assumes away changes in the labor force due to deaths caused by the disease, and which could potentially be significant (Barro et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

“…Source: https://blogs.wsj.com/economics/2020/03/18/newsletter-the-layoffs-are-starting/ 11Barro et al (2020) use data from the 1918-1920 Great Influenza Epidemic to estimate mortality rates of 2%.…”

mentioning

confidence: 99%

Fiscal Policy during a Pandemic

Faria-e-Castro

2020

View full text Add to dashboard Cite

I study the effects of the 2019-20 coronavirus outbreak in the United States and subsequent fiscal policy response in a nonlinear DSGE model. The pandemic is a shock to the utility of contact-intensive services that propagates to other sectors via general equilibrium, triggering a deep recession. I use a calibrated version of the model to analyze different types of fiscal policies. I find that UI benefits are the most effective tool to stabilize income for borrowers, who are the hardest hit, while savers may favor unconditional transfers. Liquidity assistance programs are effective if the policy objective is to stabilize employment in the affected sector. I also study the effects of the $2 trillion CARES Act of 2020.

show abstract

The Coronavirus and the Great Influenza Pandemic: Lessons from the “Spanish Flu” for the Coronavirus’s Potential Effects on Mortality and Economic Activity

Cited by 717 publications

References 7 publications

A Simple Planning Problem for COVID-19 Lockdown

A Simple Planning Problem for COVID-19 Lockdown

The Macroeconomic Effects of COVID-19 in Montenegro: A Bayesian VAR Approach

Fiscal Policy during a Pandemic

Contact Info

Product

Resources

About