<p>Pandemics do lead to drop in output and hence sometimes to recessions, that is well established (e.g. see <a href="https://www.federalreserve.gov/econres/ifdp/files/ifdp1295.pdf" rel="nofollow noreferrer">Ma et al 2020</a> as an example) but there is no solid research linking Spanish flu and Great Depression or swine flu to Great Recession. The drop of output from pandemic is virtually always sudden and there is virtually always a V shaped quick recovery. This pattern does not fit Great Depression or Great Recession.</p>
<p>Already prima facie that seems to be a stretch of an idea. The Spanish flu outbreak happened between 1918-20. Great Depression happened almost decade after. Outbreak of a disease should lead to recession immediately not 10 years after the disease was dealt with. I do not think that anyone seriously excepts economy to suddenly crash due to covid 10 years from now.</p>
<p>In addition Great Depression has well established primary cause in stock market bubble and secondary cause in bad monetary policy (see Bernanke Essays on the great depression). There isn't any big missing piece in our understanding of how Great Depression happened that could be potentially filled by decade old event.</p>
<p>When it comes to swine flu and Great Recession it makes even less sense. We know that Great Recession originated with the housing market crash, which in turn was caused by excessive lending, overleveraging, financial malpractice and lack of sound regulation (see Eichengreen Hall of Mirrors). The housing bubble burst (depending on how you date it) sometimes between last quarter of 2007 and first quarter of 2008.</p>
<p>Swine flu was first identified in Mexico in April 2009 (see <a href="https://www.nhs.uk/conditions/swine-flu/#:%7E:text=%22Swine%20flu%22%20was%20the%20popular,swine%20flu%20is%20A%2FH1N1pdm09." rel="nofollow noreferrer">NHS</a> official site).  Now sometimes effect can precede cause (November gift buying is caused by December Christmas). But it is extremely implausible that markets somehow expected swine flu to be discovered (by very nature this is completely iid shock), and then out of all markets it crashed somehow real estate market.</p>

CC BY-SA 4.0
2022-11-21T18:38:15.103Z
2022-11-21T18:38:15.103Z
1muflon1
<p>I was just wondering whether the recent COVID pandemics could lead or not to similar economic problems to the crash of the USA market in 1929. I then noticed that people had just faced the Spanish flu, which led to similar conditions to our last pandemics.</p>
<p>It is also remarkable, but perhaps not that related, that the crash of the Real State Market was more or less at the same period of the &quot;Swine Flu&quot;, that of course, was less concerning than the recent pandemics. In any case, does anyone know some study correlating the afore studies?</p>

CC BY-SA 4.0
2022-11-21T18:35:34.300Z
That Spanish flu led to the 1929 crash seems rather implausible as the flu pandemic [ended in 1920](https://en.wikipedia.org/wiki/Spanish_flu#End_of_the_pandemic).  The years in between were a period of [rapid economic growth in the US](https://www.thebalancemoney.com/roaring-twenties-4060511#:~:text=The%201920s%20is%20the%20decade,of%20being%20a%20global%20power.).
Adam Bailey
<macroeconomics>
Does anyone know of a study comparing the Spanish Flu and the crash of the USA market in 1929
L.F. Cavenaghi
# Does anyone know of a study comparing the Spanish Flu and the crash of the USA market in 1929

(Asked by: username_0 on 2022-11-21)

I was just wondering whether the recent COVID pandemics could lead or not to similar economic problems to the crash of the USA market in 1929. I then noticed that people had just faced the Spanish flu, which led to similar conditions to our last pandemics.

It is also remarkable, but perhaps not that related, that the crash of the Real State Market was more or less at the same period of the "Swine Flu", that of course, was less concerning than the recent pandemics. In any case, does anyone know some study correlating the afore studies?

**Tags:** macroeconomics

> **Comments:**
> **username_1**: That Spanish flu led to the 1929 crash seems rather implausible as the flu pandemic [ended in 1920](https://en.wikipedia.org/wiki/Spanish_flu#End_of_the_pandemic).  The years in between were a period of [rapid economic growth in the US](https://www.thebalancemoney.com/roaring-twenties-4060511#:~:text=The%201920s%20is%20the%20decade,of%20being%20a%20global%20power.).  

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## 1 answers

### Answer by username_2 on 2022-11-21. Score: 1 | Accepted answer

Pandemics do lead to drop in output and hence sometimes to recessions, that is well established (e.g. see [Ma et al 2020](https://www.federalreserve.gov/econres/ifdp/files/ifdp1295.pdf) as an example) but there is no solid research linking Spanish flu and Great Depression or swine flu to Great Recession. The drop of output from pandemic is virtually always sudden and there is virtually always a V shaped quick recovery. This pattern does not fit Great Depression or Great Recession.

Already prima facie that seems to be a stretch of an idea. The Spanish flu outbreak happened between 1918-20. Great Depression happened almost decade after. Outbreak of a disease should lead to recession immediately not 10 years after the disease was dealt with. I do not think that anyone seriously excepts economy to suddenly crash due to covid 10 years from now.

In addition Great Depression has well established primary cause in stock market bubble and secondary cause in bad monetary policy (see Bernanke Essays on the great depression). There isn't any big missing piece in our understanding of how Great Depression happened that could be potentially filled by decade old event.

When it comes to swine flu and Great Recession it makes even less sense. We know that Great Recession originated with the housing market crash, which in turn was caused by excessive lending, overleveraging, financial malpractice and lack of sound regulation (see Eichengreen Hall of Mirrors). The housing bubble burst (depending on how you date it) sometimes between last quarter of 2007 and first quarter of 2008.

Swine flu was first identified in Mexico in April 2009 (see [NHS](https://www.nhs.uk/conditions/swine-flu/#:%7E:text=%22Swine%20flu%22%20was%20the%20popular,swine%20flu%20is%20A%2FH1N1pdm09.) official site). Now sometimes effect can precede cause (November gift buying is caused by December Christmas). But it is extremely implausible that markets somehow expected swine flu to be discovered (by very nature this is completely iid shock), and then out of all markets it crashed somehow real estate market.


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