USC CREATE: Effects on the U.S. of an H1N1 Epidemic: Analysis with a Quarterly CGE Model

Описание: Special CREATE Research Seminar with Peter B. Dixon

In mid-2009 it seemed likely that the U.S. would face an H1N1 influenza epidemic in the winter of 2009-10. Fears were held that the epidemic could be as serious as those of 1957 and 1968, which caused approximately 70,000 and 34,000 deaths in the U.S., and could possibly be even as serious as the 1918 epidemic, which killed 500,000 U.S. residents. Such epidemics are not only a medical crisis, but may have significant economic effects. Fortunately, it now appears that H1N1 will not be as devastating in 2010 as was first feared. Nevertheless, investigation of the economic effects of a major epidemic is still of interest as an input to contingency planning.

This paper explores the potential economic effects of a hypothetical H1N1 epidemic in the U.S. We simulate these effects using a quarterly CGE model. Quarterly periodicity allows us to capture the short-run nature of an epidemic. We find potentially severe economic effects in the peak quarter. Averaged over the epidemic year the effects are considerably damped. Our results indicate that the macroeconomic consequences of an epidemic are more sensitive to demand-side effects such as reductions in international tourism and leisure activities than to supply-side effects such as reductions in productivity. This suggests that demand stimulus policies might be an appropriate economic response to a serious epidemic.