PanamaTimes

Thursday, Mar 28, 2024

What history tells you about post-pandemic booms

What history tells you about post-pandemic booms

People spend more, take more risks—and demand more of politicians

Previous post-pandemic booms hold a number of lessons. The first is that although people are keen to get out and spend once the threat of infection passes, some uncertainty lingers. The second is that the structure of the economy undergoes a revolution. Automation rises and people become more entrepreneurial.

The last is that political instability tends to rise, as those who have suffered during a pandemic seek redress. Just think of “Les Misérables”, set after a cholera epidemic in France in the early 1830s. Enjoy the coming good times while they last; there may be a twist in the tale before long.

The cholera pandemic of the early 1830s hit France hard. It wiped out nearly 3% of Parisians in a month, and hospitals were overwhelmed by patients whose ailments doctors could not explain.

The end of the plague prompted an economic revival, with France following Britain into an industrial revolution. But as anyone who has read “Les Misérables” knows, the pandemic also contributed to another sort of revolution.

The city’s poor, hit hardest by the disease, fulminated against the rich, who had fled to their country homes to avoid contagion. France saw political instability for years afterwards.


So how will our economy boost after the pandemic?

With countries lifting the stay-at-home orders and promoting vaccinations, the world economy is now in a recovery mode. However, the situation is still unclear for many economists and policymakers. So let us take a glimpse at our history and what it tells us about the post-pandemic boom?

History suggests that after a series of disruptions like world wars and pandemics, GDPs bounce back. It offers three lessons- People like to spend, crises encourage business to employ new innovations and political instabilities.


People like to spend

History suggests that people accumulate savings during the first phase of economic recovery as spending opportunities vanish. Even in the first half of the 1870s, British household savings rates doubled during the smallpox era. Japan’s savings rate doubled during the first world war.

History also offers us a guide to what people do once life gets back to normal. Spending rises along with employment, but not in excess. History also shows when the Spanish flu was defeated in 1920, America felt like “a sick and tired” nation.

According to Goldman Sachs, an American consumer spends only 20% of their saving during 1946–49 (after world war II). And in 1949, the economy went into recession. Therefore, there is still little evidence of pandemic inducing surges in inflation.


Employing new innovations

Taking about the supply side of the economy- meaning how and where goods and services are produced. Some people may try new innovations to earn money. Historians believe that the Black Death made Europeans more adventurous.

Piling on ships and sailing towards new lands- something less risky than people dying at home. According to the National Bureau of Economic Research published in 1948, the number of startups increased during 1919.

The economists have made another link between pandemic and use of labour and technology. A research paper by IMF looks at recent outbreaks such as Ebola and SARS. The findings suggest the pandemic speeds up the employment of robots, especially when health is a significant issue — for example, the rise of automation in America during the 1920s. Some have even made links between the Black Death and Johannes Gutenberg Press.

A paper published by the Federal Reserve Bank of San Francisco finds real wages increase after the pandemic. Sometimes, this is through the macabre mechanism.


Political Instability

When people have suffered in large, attitudes could shift towards the working class. Such incidences have led to political disorder. This is because pandemics can sometimes force us to look at pre-existing inequalities and political instability.

Ebola in 2013–16 increase violence in West Africa by 40%.

“It is reasonable to assume that, as the pandemic fades, unrest may re-emerge in locations wherever it previously existed,” researchers write in another IMF paper. Social unrest seems to peak two years after the pandemic ends. Therefore, appreciate the boom while it endures. Before long, there may be a twist in the story.

Newsletter

Related Articles

PanamaTimes
0:00
0:00
Close
Apple warns against drying iPhones with rice
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
Global Law Enforcement Dismantles Lockbit Ransomware Operation
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
The President of Argentina Javier Mile does not fly private, he flies commercial, with the citizens he represents. And they LOVE him for it.
Bitcoin Reaches $50,000 for First Time in Over Two Years
Belo Horizonte: Brazil's Rising Carnival Hotspot for 2024
In El Salvador, the 'Trump of Latin America' stuns the world with a speech slamming woke policing after winning a landslide election
Tucker’s interview with Putin is over 50M views on X within the first 5 hours.
Finnish Airline, Finnair, is voluntarily weighing passengers to better estimate flight cargo weight
President Nayib Bukele has proudly announced El Salvador's remarkable achievement of becoming the safest nation in the Western Hemisphere.
Former Chilean President Sebastian Piñera Dies in Helicopter Crash
This farmer seems to understand science a bit more than the event organizer, Klaus Schwab.
Facebook turns 20: From Mark Zuckerberg's dormitory to a $1trn company
The Coolest Dictator in the World" on the Path to Victory in El Salvador
Macron, France and fake news
Indian-Origin Man 'King' Arrested For Smuggling $16 Million Drugs Into US
Can someone teach Americans that not every person with slanted eyes is Chinese?
Europe's Farmers Feeding the People, Protesting Against Politicians Who Do Nothing for Their Country and Serve Only Themselves at Taxpayers' Expense
Paris Restaurant That Inspired 'Ratatouille' Loses $1.6 Million Worth Of Wine
Brazilian Police Investigate Bolsonaro's Son for Alleged Illegal Spying
Police in Brazil Raid Residence of Bolsonaro Associate Over Allegations of Illegal Spying
Border Dispute Escalates as Texas Governor Vows Increased Razor Wire
OpenAI Enhances ChatGPT-4 Model, Potentially Addressing AI "Laziness" Issue
The NSA finally acknowledges spying on Americans by acquiring sensitive data
Report Reveals Toxic Telegram Group Generating X-Rated AI-Generated Fake Images of Taylor Swift
US Border Patrol States 'No Plans' to Remove Razor Wire Installed in Texas
Bitcoin Experiences Approximately 20% Decline in Value
Klaus Schwab recently appointed himself as the Earth's "trustee of the future."
DeSantis Drops Out, Endorses Trump.
Nikki Haley said former President Trump is "just not at the same level" of mental fitness as he was while president in 2016.
Residents of a southern Mexican town set the government palace on fire in response to the police killing of a young man
Samsung Launches AI-Driven Galaxy S24, Ushering in New Smartphone Era
Judge Questions SEC's Regulatory Overreach in Coinbase Lawsuit
The Ecuador prosecutor who was investigating the television studio attack, has been assassinated.
Is artificial intelligence the solution to cyber security threats?
Vivek Ramaswamy suspends his US election campaign and endorses Trump.
Viral Satire: A Staged Satirical Clip Mistaken as Real Footage from the 2024 World Economic Forum in Davos
The AI Revolution in the Workforce: CEOs at Davos Predict Major Job Cuts in 2024
Ecuador Reports 178 Hostages in Prison Gang Standoff
The Startling Cuban Espionage Case That Has Rattled the US Government
Two Armed Men in Ecuador, Dressed as Batman and The Joker Storm the Streets.
Armed Gang Raids Ecuadorian TV Station Following State of Emergency Declaration
Anti-Democratic Canada: Journalist Arrested for Questioning Canadian Finance Minister on Support of Terrorist Group
Ecuador's 'Most-Wanted' Criminal Vanishes from Prison
Mexican Cartel Supplied Wi-Fi to Locals Under Threat of Fatal Consequences for Non-Compliance
Border Surge Leads to Over 11,000 Migrants Waiting in Northern Mexico
Outsider Candidates Triumph in Latin American Elections
As Argentina Goes to the Polls, Will the Proposal to Replace the Peso with the Dollar Secure Votes?
Fatal Shark Attack Claims Life of Boston Woman Paddleboarding Near Bahamas Resort, According to Police
×