A Vicious Cycle: How Pandemics Lead to Economic Despair and Social Unrest
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Summary:
In this paper we analyze the dynamics among past major pandemics, economic growth, inequality, and social unrest. We provide evidence that past major pandemics, even though much smaller in scale than COVID-19, have led to a significant increase in social unrest by reducing output and increasing inequality. We also find that higher social unrest, in turn, is associated with lower ourput and higher inequality, pointing to a vicious cycle. Our results suggest that without policy measures, the COVID-19 pandemic will likely increase inequality, trigger social unrest, and lower future output in the years to come.
Series:
Working Paper No. 2020/216
Subject:
Communicable diseases COVID-19 Econometric analysis Health Income distribution Income inequality National accounts Personal income Vector autoregression
Frequency:
regular
English
Publication Date:
October 16, 2020
ISBN/ISSN:
9781513559162/1018-5941
Stock No:
WPIEA2020216
Pages:
22
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