paper: Cities w/ aggressive pandemic responses recover faster economically

1,983 Views | 6 Replies | Last: 5 yr ago by tysker
Sisyphus
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This is a paper from MIT and the NY Fed based on data from the 1918 pandemic
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3561560



Quote:

"Our analysis yields two main insights. First, we find that areas that were more severely affected by the 1918 Flu Pandemic see a sharp and persistent decline in real economic activity. Second, we find that early and extensive NPIs (non-pharmaceutical interventions) have no adverse effect on local economic outcomes. On the contrary, cities that intervened earlier and more aggressively experience a relative increase in real economic activity after the pandemic. Altogether, our findings suggest that pandemics can have substantial economic costs, and NPIs can have economic merits, beyond lowering mortality."

NPIs implemented in 1918 resemble many of the policies used to reduce the spread of COVID-19, including school, theater, and church closures, public gathering and funeral bans, quarantine of suspected cases, and restricted business hours.


Duncan Idaho
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It is almost like they are suggesting that communities that don't collectively suffer from PTSD are quicker to return to a normalize level of activity and interaction than those that suffer from PTSD after witnessing dramatic scenes of death.

Texaggie7nine
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Should post that over here and watch the fireworks

https://texags.com/forums/16/topics/3104786
7nine
Little Bill
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AG
Wealth and prosperity are relative.

We're not going to return to "how things were" for awhile after this is over. That being said, it a city/region/nation can take its figurative medicine as quickly as possible, then it will be able to get back to business (potentially) faster than other political entities that drug out the process. And they will be relatively better off than the because of it.

Also remember that one of the greatest economic booms occurred immediately after World War I and the Spanish Flu pandemic--the Roaring 20's.

My forecast is two years of absolute misery followed by ten years of a massive boom.

We'll enjoy the boom because we have all suffered through the misery.
UTExan
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A short shutdown is totally worth it. Where we have failed is to impress upon our people the fact that they must prepare for inevitable pandemics: physically, medically, financially, emotionally and spiritually.
“If you’re going to have crime it should at least be organized crime”
-Havelock Vetinari
2PacShakur
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AG
More layman: https://www.nytimes.com/interactive/2020/04/03/upshot/coronavirus-cities-social-distancing-better-employment.html?action=click&module=Editors%20Picks&pgtype=Homepage
ElephantRider
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AG
Texaggie7nine said:

Should post that over here and watch the fireworks

https://texags.com/forums/16/topics/3104786

Good god those people are delusional
tysker
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AG
I think results make sense and actually mirror much of complaints about a one-size fits all response. Also its hard to compare such manufacturing and agriculture-based economies and communities to the modern consumer-based economies.

Quote:

A main concern for our empirical approach is that the policy response may be endogenous. For instance, local officials may be more inclined to intervene if the local exposure to the flu is higher, which in turn may be correlated with other factors such as socio-demographic or geographic characteristics (Bootsma and Ferguson, 2007). Moreover,an alternative concern is that interventions reflect the quality of local institutions, including the local health care system. Places with better institutions may have lower costs of intervening, as well as higher growth prospects.


There are, however, important details that suggest that the variation across cities is unrelated to economic fundamentals and is instead largely explained by city location. First,local responses were not driven by a federal response, as no coordinated pandemic plans existed.12 Second, as discussed in Section 2, the second wave of the 1918 flu pandemic swept the country from east to west, affecting cities and states in the eastern part of the country earlier and more severely. Given the timing of the influenza wave, cities that were affected later appeared to have implemented NPIs sooner as they were able to learn from cities that were affected in the early stages of the pandemic (Hatchett et al.,2007). Consequently, the distance to the east coast seems to be best in explaining variation in NPIs across cities (see also Figure 3). The main identification concern thus becomes that differences across areas with aggressive and less aggressive NPIs are driven by a differential responses of cities in the west to the end of WWI, for instance, because they are more exposed to the agricultural boom and bust (Rajan and Ramcharan, 2015)
...
The table further reveals that cities which reacted faster are indeed located further west,as reflected by a lower longitude. In line with being further west, those cities have a lower mortality in 1917 and in 1918 and are located in states whose industry tends to be oriented more toward agriculture rather than manufacturing. In our regressions, we thus control for the importance of agriculture in each city's state. Reassuringly for our purposes, other than differences in the longitude and the variation in the local industry structure, there are no observable differences across cities with different NPIs.
Cities hit later in the wave have time to read and react and make better choices based on evidence. Interesting they account for the state's level of agriculture and then are applying that standard to the city, no accounting for the size of the city relative to the rest of the state (think think metro NYC being 70% of NYs population). Also how many of those western cities were going to grow strongly anyways due the second industrial revolution, especially given WWI being over and the large numbers of people (immigrants and us-born) moving west?
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