The economic effects of the Spanish Flu
What were they? Obviously with a World War going on the context was different, but although I am aware there was a depression in 1920, it seemed that the rest of the decade was marked by growth (which ended badly, but not for reasons due to the Spanish Flu).
Is there a reason to expect that the financial ramifications will be more severe with this pandemic? Because I would have thought a World War would have made things worse and not better.
I'm not an economist so would love a professional opinion.
by Anonymous | reply 6 | March 30, 2020 10:25 AM
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Not worse. World Wars tend to offer full employment.
by Anonymous | reply 1 | March 30, 2020 7:13 AM
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Economic boom in the 1920’s
by Anonymous | reply 2 | March 30, 2020 7:54 AM
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It’s all up to sound economic policy. This means keeping cheap money and keeping fiscal policy expansionary. What we don’t want is big budget cuts from 2021 to try and cut public debt. That can happen organically as the economy recovers. Basically keep things loose. Of course that risks inflation but it’s a better risk to run than austerity.
I think that’s the way things will unfold as there is no longer a constituency for conservative budget policy. The question will be who gains and who loses, which is to say what sort of fiscal stimulation you keep - low taxes for the wealthy, or spending money on social programs and infrastructure. I think we all know what the answer to that will be if the Republicans get back in.
By the way, yes I am a professional economist.
by Anonymous | reply 3 | March 30, 2020 8:22 AM
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Yeah, the flu ravaged the world from 1918-1919, and there was a huge economic boom in the 1920s. The crash didn't come until 1929.
If someone could explain how that worked, I'd appreciate it.
by Anonymous | reply 4 | March 30, 2020 9:38 AM
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And because this is a global situation, how do you see the situation on a global scale?
by Anonymous | reply 5 | March 30, 2020 10:15 AM
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Actually there was a depression in 1920 and 1921. It's largely forgotten. Most people also fail to realize one of the reason rural areas were less affected by the Great Depression was simply they were in a depression for the Great Depression hit.
Also there were recessions in 1924 and 1926. The 1926 seemly caused by Henry Ford shutting down his factories to switch production from one type of car to the other.
by Anonymous | reply 6 | March 30, 2020 10:25 AM
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