Pandemics and asymmetric shocks: evidence from the history of plague in Europe and the Mediterranean

The history of plague suggests that severe pandemics can have extremely important and potentially permanent asymmetric economic consequences. However, these consequences depend upon the initial conditions and could not be foretold a priori. To support this view, this short article illustrates the ability of major plagues to cause asymmetric shocks. The Black Death might have been at the origin of the Great Divergence between western Europe and East Asia, but also within Europe it had quite heterogeneous consequences. The last great European plagues of the seventeenth century favoured the rise of North Europe to the detriment of the South. Additionally, within Italy, they had a differential impact allowing for the rise of the Sabaudian State and contributing to the decline of the Republic of Venice. The article argues that the implication for today societies facing COVID-19 is that given that the final demographic and economic consequences of this pandemic are impossible to predict, collective answers to the crisis, possibly coordinated by the EU, are highly advisable.