Mark Koyama, 16 October 2020

Seven hundred years ago the worst pandemic in history killed almost half the population of Europe and the Middle East. Mark Koyama tells Tim Phillips about the centuries-long economic impact of the Black Death.

Sergio Galletta, Tommaso Giommoni, 03 October 2020

The COVID-19 outbreak is expected to increase income inequality around the world as the poorer are likely to be hit harder by the pandemic’s negative economic impact. Focusing on Italy, this column argues that such distributional consequences also appeared during the 1918 influenza pandemic. Income inequality became higher in areas more afflicted by the flu pandemic, and this is mostly explained by a reduction in the share of income held by poorer people. This effect seems to persist even a century after the pandemic.

Sofoklis Goulas, Rigissa Megalokonomou, 17 August 2020

During the 2009 swine flu pandemic, Greece eased its high school attendance policy despite few cases being reported among children of high school age. This column examines the relationship between the relaxed attendance policy and absences, academic performance, and neighbourhood income. Students of higher prior performance took more absences, while students of lower prior performance kept going to school. Prior performance is positively associated with neighbourhood income, suggesting that students in poorer neighbourhoods may be less likely to follow school distancing guidelines during a pandemic. The relaxed attendance policy is associated with decreased performance for students that take more absences.

Long Chen, Michael Spence, 17 July 2020

The pandemic economy has exhibited sharp and, in many cases, deep contractions across a wide range of countries. Mobility has turned out to be a key factor in the co-evolution of the economy and the pandemic. This column estimates the magnitude of daily economic contractions by constructing a pandemic economy tracker based on mobility data and makes an important set of findings. First, speed of policy response is crucial in successfully navigating the pandemic economy. Second, it is substantially more difficult for larger economies to control the virus. Third, stock markets have generally rebounded faster than the economies they support. Finally, third wave countries, primarily emerging and developing economies, are having difficulty controlling the virus without substantial mobility restrictions and contractions.

Mario Francesco Carillo, Tullio Jappelli, 14 July 2020

Many developing countries do not have adequate health infrastructure or the capacity to effectively implement lockdown policies to contain the spread of COVID-19. This column studies the historical experience of Italy during the 1918 Great Influenza in order to shed light on the consequences of pandemics in societies where it is difficult to implement lockdown policies or where healthcare systems are lacking. Using regional GDP and mortality data, it finds a strong negative effect of the pandemic on local economic growth. However, these adverse effects mostly dissipated three years after the pandemic.

Stefan Pollinger, 05 July 2020

Despite diverse and considerable efforts, the pandemic is keeping the world in a state of apprehension and discord. This column argues that eradicating Covid-19 is possible through a combination of case detection and social distancing, which would allow the pandemic to be eliminated at low additional economic and health costs. A simple function of observables, the optimal policy is easily implementable, but it raises important privacy concerns. The time to have a serious political discussion about these concerns has come.

Cevat Giray Aksoy, Barry Eichengreen, Orkun Saka, 15 June 2020

What will be the political legacy of the COVID-19 pandemic? This column uses data from the 2006-2018 Gallup World Polls to show that epidemic exposure during an individual’s ‘impressionable years’ of 18 to 25 has a persistent negative effect on trust in political institutions and leaders, especially in democracies. Combined with other evidence that trust is important for limiting the spread of infection, this raises the spectre of a circular, self-reinforcing spiral in which poor public health policy leads to deeper distrust, further undermining the effectiveness of public health policy.

Giulia Giupponi, Camille Landais, 01 April 2020

Short-time work is a subsidy for temporary reductions in the number of hours worked in firms affected by temporary shocks. Evidence suggests that it can have large positive effects on employment and can be more effective than unemployment insurance or universal transfers. This column discusses how the COVID-19 crisis – with its mandated reduction in hours of work and massive liquidity crunch for firms – is a textbook case for the use of short-time work. Taking into account available evidence and the current situation, it proposes guidelines to effectively implement short-term work.

Yi Huang, Chen Lin, Pengfei Wang, Zhiwei Xu, 23 March 2020

With the COVID-19 outbreak having officially become a pandemic, it is essential to consider not just how to prevent further public health crises but also economic and financial crises. This column suggests that in both cases, recent lessons from China are instructive. China enacted aggressive public health policies that appear to have been effective, at least in the short term. But the measures taken to stem the public health crisis may still lead to a domestic economic meltdown that could infect international trade.

Arnstein Aassve, Guido Alfani, Francesco Gandolfi, Marco Le Moglie, 22 March 2020

Long-term effects of a pandemic go well beyond the demographic losses. This column uses a representative survey of the US population in the aftermath of the Spanish flu to evaluate the permanent consequences of the pandemic on individual behaviour. It finds that social disruption during the period led to long-term deterioration in social trust, which had important economic consequences. The findings highlight the importance of a strong response to the COVID-19 pandemic. 

Claudia Biancotti, Alessandro Borin, Federico Cingano, Pietro Tommasino, Giovanni Veronese, 18 March 2020

Governments around the world are tackling the COVID-19 pandemic from different angles. This column, by members of the Bank of Italy’s COVID-19 monitoring group, argues that in the absence of coordinated containment measures, the most likely outcome is the worst of both worlds: preventable loss of lives and of GDP. Predictability and consistency in policy responses across space and time is key, both in the public health and economic domains. Effective cooperation in avoiding a 'common bad' might be able to endow the world with the crucial common good of a more complete and effective governance. The European Union should be the first to set an example.

Richard Baldwin, Beatrice Weder di Mauro, 06 March 2020

Extraordinary times call for extraordinary efforts

A video interview recorded with Richard Baldwin and Beatrice Weder di Mauro to mark the publication of the CEPR / VoxEU 'instant' eBook, Economics in the Time of Covid-19.  Tim Phillips discusses the themes of the book and the economic challenges ahead

Download the book FREE here 

Richard Baldwin, Beatrice Weder di Mauro, 06 March 2020

The novel coronavirus is both something old and something new. As usual, the pandemic is both an aggregate demand and an aggregate supply shock, but the fact that it has hit China first and hardest, and the supply chain implications of this, make it something new. This column introduces a new Vox eBook containing 14 essays written by leading economists on a wide array of topics related to COVID-19 economics.

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