François R. Velde: What Happened to the US Economy During the 1918 Influenza Pandemic?, in: Federal Reserve Bank of Chicago, Working Paper, No. 2020-11, April 2020, https://doi.org/10.21033/wp-2020-11.
Arthur F. Burns and Wesley C. Mitchell discovered for 1918 a recession of “exceptional brevity and moderate amplitude” in their 1946 publication. François R. Velde confirms their judgment by examining a variety of high-frequency, aggregate and cross-sectional data. Industrial output fell sharply but rebounded within months. Retail seemed little affected and there is no evidence of increased business failures or stressed financial system. Cross-sectional data on manufacturing employment indicates that most of the recession, brief as it was, was due to the Armistice rather than the epidemic. Data from the nationwide coal industry documents the sharp but short-lived impact of the epidemic on labor supply and the lack of spill-overs on demand. City-level economic indicators show that the (brief) interventions to hinder the contagion reduced mortality at little economic cost because reduced infections mitigated the impact on the labor force.