Fig. C.5.

Response of primary surplus (in % of GDP) to epidemic shocks in the financial capitalism period (1900–2016) Notes: This figure depicts the impulse response -- estimated by Jordà (2005)’s local projections – of UK primary surplus to a one s.d. shock in the epidemic death rate. We include wars death rate and a dummy taking value one if an adverse climate event occurred, zero otherwise. To control for autocorrelation we include two lags of the dependent and control variables. Significant estimates are denoted by dots. Grey bands indicate 90% confidence bands. Standard errors are corrected for heteroskedasticity and autocorrelation (Newey, West, 1987, Newey, West, 1994).