Governments' accounts and pandemics

Purpose Early evidence suggests that coronavirus disease 2019 (COVID-19) caused a sharp deterioration in fiscal accounts worldwide. This paper empirically assesses the impact of previous pandemics and epidemics. Design/methodology/approach Using large sample 170 countries from 2000 to 2018, this study relies on Jordà's (2005) local projection method trace pandemics' short- medium-term dynamic several aggregates. Findings shows (qualitatively) similar responses those observed more recently with COVID-19 have characterized effects pandemics. While effect has been economically statistically significant persistent, it varies; affect government expenditures strongly than revenues advanced economies, while converse applies developing countries. The author also finds asymmetric depend whether country is as chronic surplus or deficit type. Another factor generates an response prevailing phase business cycle economy was when pandemic shock hits. Research limitations/implications paper's findings provide lower bound what current will inflict countries’ situation. That said, set epidemics used are geographically concentrated did not all such systemic synchronized manner recently. Originality/value first explore side type health-related shocks, most literature focused traditional macroeconomic effects.