Using past epidemics to estimate the macroeconomic implications of COVID-19: A bad idea!

This work is intended to show that past epidemic scenarios are not suitable to estimate the macroeconomic impact of the new 2019 coronavirus. Using five centuries of macroeconomic data for England and a unique dataset on epidemics and other significant events (i.e., wars and natural disasters), we show that the macroeconomic effect of epidemics reflects the socio-economic features characterizing different eras. A mapping between past epidemic scenarios and the COVID-19-induced environment can thus lead to misleading outcomes. We believe our evidence to be of general interest and key for policymakers forced to implement rapid and effective policies.