PST - Historically Pandemics Have Been Deflationary
Undersaved, over-levered households and businesses were overdue for a secular shift to more self-preserving financial management well before the pandemic hit. Now, new research points out that COVID-19 may well solidify that behavioural shift for years hereafter and fuel deflationary forces in the process.
A paper from the Centre for Economic Policy Research points out that historically, pandemics are associated with falling real rates, depressed asset returns, and excess saving for decades following such outbreaks. See The long-run economic consequences of pandemics:
The great historical pandemics of the last millennium have typically been associated