Pandemics can have significant impacts on natural interest rates and real wages for multiple decades, new historical research published by the Federal Reserve Bank of San Francisco finds.

“If the trends play out similarly in the wake of Covid-19 – adjusted to the scale of this pandemic – the global economic trajectory will be very different than was expected only a few weeks ago,” researchers say, noting that it is likely to be considered the most serious pandemic since 1918.

Òscar Jordà