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ECONOMIC FREEDOM AND THE ECONOMIC CONSEQUENCES OF THE 1918 PANDEMIC
Author(s) -
Geloso Vincent,
Bologna Pavlik Jamie
Publication year - 2021
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/coep.12504
Subject(s) - economic freedom , economics , argument (complex analysis) , index of economic freedom , shock (circulatory) , economic cost , economic analysis , economic model , economic impact analysis , pandemic , index (typography) , economic security , covid-19 , macroeconomics , economic growth , market economy , microeconomics , classical economics , infectious disease (medical specialty) , medicine , biochemistry , chemistry , disease , pathology , world wide web , computer science
The 1918 flu pandemic constituted an exogenous shock on economic activity. In this paper, we condition the economic importance of these shocks on the level of economic freedom measured by the Historical Index of Economic Liberty project to test whether freer economies fared better. Our argument is that higher levels of economic freedom meant a greater ability to adjust to shocks by reducing frictions in the reallocation of resources and the reorganization of economic activity. We find that higher levels of economic freedom mitigated the pandemic's effect. We link this finding with the literature on economic freedom and crises. ( JEL I15, N10, N30)