Questions and answers about coronavirus and the UK economy

Lessons from history

How have past pandemics affected business?

Almost all UK firms and industries have been badly affected in the short term by the spread of Covid-19. Looking back at past pandemics – the Black Death, the Great Plague of London and the Spanish flu – provides some perspective on longer-term prospects for business.

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After coronavirus: deflation or inflation?

Most economists are reasonably confident that once the pandemic has subsided, employment will eventually recover to its previous normal levels. But there are two markedly different schools of thought on the future of inflation: further deflationary pressures or a return to systemic inflation.

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Rebuilding after the Second World War: what lessons for today?

How did the UK reduce its very high ratio of public debt to GDP after the Second World War while simultaneously expanding the welfare state? Low interest rates, low unemployment, rapid economic growth and tolerance for higher taxation all played a role.

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What are the long-run economic consequences of pandemics?

Historical epidemics provide only a loose guide to the likely economic impact of coronavirus. What history does suggest is that when they occur in societies already under stress, they can provoke wide-ranging and long-term changes in attitudes, culture and institutions.

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Risk in the time of Covid-19: what do we know and not know?

Coronavirus has exposed the world’s population to an extreme degree of uncertainty in all dimensions of life. How does this unprecedented global event influence our risk-taking – and how can we measure it reliably?

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What are the lessons for today from running a wartime economy?

The world continues to experience episodes that remind us of the profound disruptions of twentieth-century wartime. But how far does the war analogy stretch? Covid-19 has been able to disrupt our economy at a speed that no foreign enemy has ever matched.

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What is the likely future role of the state in the UK economy?

Economic distress caused by the pandemic, the lockdown and the recession have required a big increase in public spending. How has the crisis affected the size of the state and the effectiveness of government policy?

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What are the effects of recessions on health?

An economic downturn affects people’s lives in many ways. Economic research has investigated how recessions affect their health and health behaviour – and how these outcomes vary across different generations and different socio-economic groups.

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What can we learn from the past about how to pay for the crisis?

Big increases in government borrowing and total public sector debt have been an essential policy response to the health and economic effects of Covid-19. But such rises are not unprecedented – and we can learn from past experiences about how best to deal with the challenges that they pose.

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Does the Spanish flu offer lessons in how to tackle a pandemic?

The influenza pandemic of 1918-19 – commonly known as the Spanish flu – infected perhaps a third of the world’s population. Many researchers, including economists, are looking back to that experience for insights into the spread of Covid-19 and potential responses.

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What happens to trade in a global downturn?

World trade typically falls far more than world GDP in a global downturn, but then bounces back quickly. Early indications suggest that the contraction in trade in the looming Covid-19 recession will be even bigger than what followed the 2007/08 global financial crisis.

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What can we learn from historical recessions and depressions?

While the Covid-19 recession has some unique characteristics, research on past experiences of economic downturns offers valuable lessons on how long recovery takes and what policies might accelerate that process.

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Funded by

UKRI Economic and Social Research Council
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