“The effects were big and differed by locality and policy response. Governments and municipalities tried to find a response. Likened to today, they varied a lot, from complete lockdown to almost complete denial,” says Ritschl. This means we can link economic responses to these policy responses. “In general, what we find is that the economic rebound was stronger, more pronounced, and more sustained in areas that had locked down early and hard,” Ritschl explains.
The historical evidence shows that although some places were revisited by the Spanish flu, good habits had been trained early on, so when a second lockdown became necessary, everybody knew what to do and the impact of repeat waves was not as strong. It’s not just the impact on the immediate vicinity that is evident.
In the case of the Spanish flu, we see how lockdowns and disruption have ripple effects across space because supply chains are affected. “Madrid goes into lockdown, economic activity is disrupted, this carries over into other provinces where the epidemic is not so strong but precautionary measures are being taken and supply chains are disrupted,” says Ritschl. “The strength of the economic fallout is pretty much like we see it today – output declines 5 or 10 percent on impact then grows back but falls again when the next wave strikes.”