The long-run effects of pandemics on inflation: Will this time be different?

Dennis Bonam; Andra Smădu

doi:10.1016/j.econlet.2021.110065

The long-run effects of pandemics on inflation: Will this time be different?

Econ Lett. 2021 Nov:208:110065. doi: 10.1016/j.econlet.2021.110065. Epub 2021 Sep 6.

Authors

Dennis Bonam^{1

2}, Andra Smădu^{1

3}

Affiliations

¹ De Nederlandsche Bank, The Netherlands.
² Vrije Universiteit Amsterdam, The Netherlands.
³ University of Groningen, The Netherlands.

Abstract

We find that past major pandemics have led to a significant decline in trend inflation in Europe that lasts for more than a decade. The effects of the COVID-19 pandemic on trend inflation could, however, be different this time around.

Keywords: Inflation; Local projections; Pandemics.