The Macroeconomic Impact of the 1918–19 Influenza Pandemic in Sweden

Martin Karlsson (1) , Mykhailo Matvieiev (2) , Maksym Obrizan (3, 4)

1 Universitat Duisberg-Essen
2 AMSE - Aix-Marseille Sciences Economiques
3 Université de Kiev
4 KSE - Kyiv School of economic

Abstract In this paper, we develop an overlapping generations model with endogenous fertility and calibrate it to the Swedish historical data in order to estimate the economic cost of the 1918–19 influenza pandemic. The model identifies survivors from younger cohorts as main benefactors of the windfall bequests following the influenza mortality shock. We also show that the general equilibrium effects of the pandemic reveal themselves over the wage channel rather than the interest rate, fertility or labor supply channels. Finally, we demonstrate that the influenza mortality shock becomes persistent, driving the aggregate variables to lower steady states which costs the economy 1.819% of the output loss over the next century.

Mots clés: epidemics; overlapping generations models; 1918-19 influenza; endogenous fertility

Domaines: Economies et finances

Martin Karlsson, Mykhailo Matvieiev, Maksym Obrizan. The Macroeconomic Impact of the 1918–19 Influenza Pandemic in Sweden. B.E. Journal of Macroeconomics, In press, ⟨10.1515/bejm-2021-0018⟩. ⟨hal-03661049⟩