What Economic strategies to deploy from Spanish Influenza Epidemic-Covid 19


Spanish Flu

The epidemic occurred between 1918 and 1920.More than 500 million people got affected. 50 million deaths were recorded (Wilton, 1993)

In occurrence of a pandemic. The world economy becomes one of the most affected sector in all nations. Increased health issues and deaths needs finances to cater for it. In history of pandemics we tend to look on What Economic strategies to deploy from Spanish Influenza Epidemic on Covid-19.

The Spanish flu is one of the most recent severe epidemics in history. The flu originated from the H1N1 virus. Where the first infections got traced from soldiers in World War I. The hygiene conditions during the war contributed the spread of the disease amongst soldiers, which later spread to wider populations.

  The virus had higher mortality among 5-year-olds and the working population of age 20 to 40 years. The virus killed more people than World War 1 did in the USA. Alone it claimed about675,000 lives . First wave of the virus began in 1917, and later in the fall and spring of 1919 (Wilton, 1993). The second wave claimed more lives due to the ignorance of restrictions earlier implemented.

 The mortality rates were however different across USA cities, leading to varied economic impacts across the state. The mortality rates ratio differed from various cities as per the given precautions by city officials to minimize the spread. Among them were; limited social interactions and minimized commerce which affected the economy. Shockingly, the spread of the disease accelerated due to the ongoing World War I in Wilton, 1993.

Impact of the Spanish Influenza Epidemic on economic growth

Before we really get to bench mark. On the great economic strategies to deploy from Spanish Influenza Epidemic on Covid-19. Firstly, let us learn about it impact on the world economy then.

Spanish flu was unique in comparison to other influenza epidemics that occurred before. The mortality rate was rampant among healthy and energetic age group. Those of between 5 years and 20-40 years old. To any nation this age group is mostly the pillar to its country’s economy. This had great consequences for industries and businesses, thus affecting the supply of resources and finished goods within a country. Reduced production also greatly affected the overall GDP of the country.


Due to a reduction in labor supply, employment rates hiked as well as wage rates between 1918 and 1920. These observations were recorded in states where Spanish flu was dense. The income level influenced economic growth based on the income per capita which is an important measure of GDP.

However, the measure was not an accurate basis of economic growth. Despite improved productivity and income per capita ratios, the overall productivity of the states had already declined and the supply was below the demand levels. Research indicates that the overall GDP declined by about 6% (Barro, Ursua, & Weng, 2020).

Among greatly affected businesses were those on service and entertainment industries. This was as a result of decline in revenues due to the social gathering restrictions put in place that time. Other merchant businesses also had declined with estimated losses between 40% to 70%. Other business were on pressure due to increased demand on their products. Such products were medical equipment, beds, and mattresses . This made manufacturing firms and mining handicapped due to a critical reduction in the labor force.

Reduction in labor force for such industries is critical as their operations require specific threshold of workers to run efficiently. The industries are also crucial for the provision of essential services in energy and transportation. Therefore, their inability to carry out their activity also affected other activities in the economy.

 Post Spanish flu impacts critically affected the hospitals. As most of the babies born during the epidemic era exhibited a lot of medical complications later on. This increased the cost of healthcare for families.

Economic growth in 1918 and 1919

The economic growth between 1918 and 1919 can not fully be linked to the Spanish flu pandemic. Concurrently, the war was ongoing and many countries were recovering while others experienced post-war recessions. Some observations indicate conflicting indicators of an improved economy. Having an increase in the Dow Jones Industrial Average from 21.7% to 30.5% in 1919. This stands as the ninth highest average to date (Barro, Ursua, & Weng, 2020).

Nevertheless, the industries resumed their optimum production levels after the Spanish flu. The recession also significantly promoted an economic boom in 1920 after the mortality rates from the pandemic began reducing. Unemployment rates were declining, and production and manufacturing experienced rapid growth (Romer, 1988). So, any economic strategies to deploy on Covid-19 depends on the duration this virus will be greatly minimized.

The real GDP also increased by 1% between 1918 and 1919 (Romer, 1988). The only indicators for a declining economy were the production output of the different industries in place.

Economic strategies to deploy from Spanish Flu Epidemic to Covid-19

            Relating to the economic downfall brought by Spanish flu in 1918 to 1919. We try to ask ourselves on what economic strategies can we deploy to cope up with this pandemic. Spanish flu era is a critical learning point to prepare for uncertainness even in the future. However, both the world and technology evolve every now and then the impact of a pandemic might differ. As certain preventive measures put in place in the past might be obsolete today.


From the Spanish flu, it is evident that the restrictions in social congregation limit business activities. Although, there has been a drastic shift in business activities from 1918 to 2020. Having as many as possible business transactions being done online. Therefore, advancement of technology and digital platforms for doing business. Will greatly help in keeping afloat several businesses even during uncertainties.

During the Spanish flu, government officials insisted that the industries remain open throughout the pandemic. Although, this contributed to an increased spread of the flu, it facilitated the economy in a good way. Apparently, many industries and manufacturing plants are closed due to the current Covid-19 pandemic. If this persists, the global supply-demand ratios will be highly affected. The productivity level of most of most countries will reduce resulting in a declining GDP.

Economic Strategies to deploy

Deployment of sophisticated IT strategies to enhance human input in industries can create an autonomous production environment for goods. Even if this will affect the employment rates , such strategies will minimize the probability of a declining GDP.

 The fiscal government also has different obligations for improving the GDP and economic growth during a pandemic. The two strategies include changes in tax reliefs and government spending. During the Spanish flu pandemic, increased government spending due to the war was observed. This enabled the country to withstand the economic impact of the epidemic.

The spending was directed towards World War 1. It accounted for about 38% of the GDP at the time. The spending aimed to increase the production and supply of commodities needed at the war. The reason the government did not shut down industries despite the looming spread of the disease (Benmelech & Frydman, 2020). The increase in government spending, therefore, minimized the impact of the pandemic to the economy. As more capital circulated in the economy for the acquisition of different resources (McKibbin & Sidorenko, 2006).

Tax cut initiatives do not realize as many benefits as that of increased government spending. As percentage of the tax relief is utilized in saving ventures minimizing the circulation of money(Faria-e-Castro, 2020).

 However, despite all efforts to increase the economic growth of an economy. It is important to be cautious to minimize the mortality rates as these crucial economic efforts will be in vain.

(Also learn the best ways to manage company finances during a predicament period covid-19)


Barro, R., Ursua, J. F., & Weng, J. (2020). “The Coronavirus and the Great Influenza Pandemic: Lessons from the Spanish Flu for the Coronavirus’s Potential Effects on Mortality and Economic Activity”. NBER Working Paper 26866.

Benmelech, E., & Frydman, C. (2020). The 1918 Influenza Did Not Kill the US Economy. VOX CEPR Policy Portal, 29.

Faria-e-Castro, M. (2020). Fiscal policy during a pandemic. FRB St. Louis Working Paper, 2020-006.

McKibbin, W. J., & Sidorenko, A. (2006). Global macroeconomic consequences of pandemic influenza. Sydney, Australia: Lowy Institute for International Policy.

Romer, C. (1988). “World War I and the Postwar Depression: A Reinterpretation based on Alternative Estimates of GNP”. Journal of Monetary Economics, 22, 99-115.

Wilton, P. (1993). Spanish flu outdid WWI in the number of lives claimed. CMAJ: Canadian Medical Association Journal, 148(11), 2036.

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