Nina Boberg-Fazlic, Markus Lampe, Maja Uhre Pedersen, Paul Sharp: Pandemics and Protectionism: Evidence from the “Spanish” flu, in: CAGE working paper No. 479, June 2020.
There has been much speculation about the impact of COVID-19 on recent trends towards international isolationism, but according to the authors of this article, that remains to be seen. They assume that valuable evidence can be gained from the “Spanish” flu of 1918-20.
It is known that the world was caught in a protectionist spiral after the First World War, but scientists have almost completely ignored the effects of the pandemic. The authors applied a differentiation strategy to the data for Europe and found that excess deaths had a significant impact on trade policy regardless of the war. An increase in excess deaths during the outbreak by one standard deviation meant 0.022 percentage points higher tariffs as a result, which would correspond to an increase by one third of one standard deviation in tariffs. Health policy should aim to avoid the experience of the interwar period and take into account the international macroeconomic impact of (not) measures taken.