The Epidemiology of Economic and Financial Crises

Graham Bird & Eric Pentecost

Published: June 2020

The COVID-19 crisis dramatically illustrates how viruses can rapidly spread across the globe with devastating effects. Increasing trade integration during the ‘first wave’ of globalisation provided a conduit through which economic disturbances could be transmitted between countries. The ‘second wave’ of globalisation involving closer international financial integration has created the potential for much more virulent transmission. This article analyses how the evolution of globalisation has affected the epidemiology of economic and financial crises, and takes the Eurozone crisis as a case study of cross-country contagion. The policy problems associated with the changing nature of transmission are also investigated.