Abstract

The paper formalizes and tests the hypothesis that greater exposure to big shocks induces stronger societal responses for adaptation and protection from future big shocks. We find support for this hypothesis in various strands of the literature and in new empirical tests using cross-country data on deaths due to COVID-19 and deaths during World War 2. Countries with higher death rates in the war saw lower death rates in the first wave of the COVID pandemic, though the effect faded in the pandemic’s second wave. Our tests are robust to a wide range of model specifications and alternative assumptions.

Highlights

  • It is hard to be confident in our responses to rare events for which we have little direct experience

  • We find support for the predictions of our theoretical model in the empirical relationship between casualties during World War 2 (WW2) and the deaths related to COVID-19

  • We have proposed and tested the hypothesis that past experiences of big shocks influence the success of a society in coping with future big shocks

Read more

Summary

Introduction

It is hard to be confident in our responses to rare events for which we have little direct experience. With little or no direct experience of a big shock, the perceived benefits from such investments will be lower Elements of this argument find support in research on how exposure to war and other forms of violent conflict affects behavior, collective actions, perceptions of fairness, and cooperation. The direct experience of such shocks provides important information in forming expectations about the gains from investing in adaptation and protection from future shocks. In testing this theory, we focus on Europe—broadly defined to embrace the Nordic countries, Russia and Central Asia—though we test robustness to using an extended set of countries with global coverage.

Foundations of the hypothesis
Insights from the literature
Evidence on World War 2 and the COVID-19 pandemic in Europe
Controls and tests for robustness
The second wave of COVID-19
Findings
Conclusions

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.