Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Friday, Mar 29, 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

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×