Maciej Stefański: GDP Effects of Pandemics: A Historical Perspective, in: Collegium of Economic Analysis Working Paper Series, Working Paper 2020/057 (December 2020).
The author estimates dynamic effects of pandemics on Gross Domestic Product (GDP) per capita with local projections, controlling for the effects of wars and weather conditions, using a novel dataset that covers 33 countries and stretches back to the 13th century. Pandemics are found to have prolonged and highly statistically significant effects on GDP per capita – a pandemic killing 1% of the population tends to increase GDP per capita by approx. 0.3% after about 20 years. The results are qualitatively robust to various model specifications, geographical division of the sample and an exclusion of extreme events such as the Black Death and the New World epidemics. The effects of pandemics differ from those of wars and weather, which are negative and die out quicker, in line with the neoclassical growth model.