With the COVID-19 outbreak causing industry worldwide to come to a grinding halt, economic growth has, inevitably, stunted. However, this is not the first time a pandemic outbreak has impacted the global economy.
The 1918 Spanish Flu Pandemic is an example of this. Estimated to have infected a quarter of the global population and to have killed 50,000,000 people, although these figures are disputed, it had such an overwhelming impact on everyday life around the world that a knock-on effect to the economy was an inevitably. The outbreak led to social distancing measures being implemented, just as they have been today. However, we’ve looked at how successful these were and whether we can expect the same result from the measures that are in place in the UK today.
The effects of social distancing during the Spanish Flu outbreak
Social distancing can take a variety of forms such as the closure of schools, preventing mass gatherings and ensuring the population stay a ‘safe’ distance apart. These types of measures are designed to slow the spread of a virus and reduce the number of casualties.
In a paper led by two Fed economists, they found that the economies in cities which implemented more severe social distancing measures early on only suffered negatively in the short term. In the medium term, however, they suffered no adverse effects, and shortly after the pandemic subsided, they saw an increase in real economic activity.
On the contrary, cities that were slower to adopt these types of measures had a higher mortality rate, resulting in a more negative impact on their economy.
So, what does this mean for the UK economy after COVID-19?
Although social distancing has undoubtedly been detrimental to the UK economy in the short-term and a recession is expected, based on the example of the Spanish Flu, the measures that have been taken should lessen the negative impact on the UK economy in the long-term.
Unlike most of the workforce in the post-war period who worked in factories and manufacturing industries, many of today’s workforce can work from home too. So, theoretically, more work can continue too.
Of course, this is an over-simplified way of looking at things, and the complexity of modern economic systems means social distancing measures might not be as effective as they were during the Spanish Flu. We also need to consider that economic activities might be unable to return to how they were pre-COVID-19. However, the effectiveness of social distancing during the Spanish Flu pandemic gives us some hope for the future of our economy.