[Mick]

With a hat tip to marketplace for this paper...

https://www.frbsf.org/economic-research/...020-09.pdf

I’m just going to shoot it into Mick’s veins.

We study rates of return on assets using a dataset stretching back to the 14th century, focusing on 15 major pandemics where more than 100,000 people died. In addition, we include major armed conflicts resulting in a similarly large death toll. Significant macroeconomic after-effects of the pandemics persist for about 40 years, with real rates of return substantially depressed.

So basically, we will feel reverberations or this for the rest of my life.  The good news, such as it is, is that wages do go up after pandemics.

BC

Interesting find, BC. I would caution against drawing too many inferences from this paper about real wages caused by labor scarcity, given that the majority of the pandemics they investigated were:

- prior to the advent of sophisticated medicine and medical professionals
- Chiefly occurring during economies dominated by agricultural production and employment
- not during periods of advances in automation that threatened the work force
- deadly across a range of ages rather than (chiefly) an older population (acknowledged by authors in their last sentence)

Also didn't see mention of the effects of currency debasements (apropos of a paper written by a Fed economist, I suppose).

The big hope suggested by this paper is long term depression of real interest rates and lower overall return on assets, leading to governmental access to that putatively cheaper capital. We'll see.

It cites the Great Depression as following the Spanish Flu -- although it was about a decade before the GD hit. The '20s were quite prosperous, relatively speaking. In any event, like the GD, consumer demand will be depressed in a way that most don't understand; ergo, we're on our way to a much-greater-than-great Great Depression, particularly if a "W" or "Nike" economic "recovery" is the result. If you're seeking good economic news, don't read Nobel-prize winning economist Joseph Stiglitz, who foresees a 30% unemployment rate, which equates to 49.38 million unemployed, based on February 2020's available work force of 164.6 million people.

[Mick]

With a hat tip to marketplace for this paper...

https://www.frbsf.org/economic-research/...020-09.pdf

I’m just going to shoot it into Mick’s veins.

We study rates of return on assets using a dataset stretching back to the 14th century, focusing on 15 major pandemics where more than 100,000 people died. In addition, we include major armed conflicts resulting in a similarly large death toll. Significant macroeconomic after-effects of the pandemics persist for about 40 years, with real rates of return substantially depressed.

So basically, we will feel reverberations or this for the rest of my life.  The good news, such as it is, is that wages do go up after pandemics.

BC

Interesting find, BC. I would caution against drawing too many inferences from this paper about real wages caused by labor scarcity, given that the majority of the pandemics they investigated were:

- prior to the advent of sophisticated medicine and medical professionals
- Chiefly occurring during economies dominated by agricultural production and employment
- not during periods of advances in automation that threatened the work force
- deadly across a range of ages rather than (chiefly) an older population (acknowledged by authors in their last sentence)

Also didn't see mention of the effects of currency debasements (apropos of a paper written by a Fed economist, I suppose).

The big hope suggested by this paper is long term depression of real interest rates and lower overall return on assets, leading to governmental access to that putatively cheaper capital. We'll see.

It cites the Great Depression as following the Spanish Flu -- although it was about a decade before the GD hit. The '20s were quite prosperous, relatively speaking. In any event, like the GD, consumer demand will be depressed in a way that most don't understand; ergo, we're on our way to a much-greater-than-great Great Depression, particularly if a "W" or "Nike" economic "recovery" is the result. If you're seeking good economic news, don't read Nobel-prize winning economist Joseph Stiglitz, who foresees a 30% unemployment rate, which equates to 49.38 million unemployed, based on February 2020's available work force of 164.6 million people.