The possible macroeconomic impact on the UK of an influenza pandemic
AbstractLittle is known about the possible impact of an influenza pandemic on a nation's economy.� We applied the UK macroeconomic model 'COMPACT' to epidemiological data on previous UK influenza pandemics, and extrapolated a sensitivity analysis to cover more extreme disease scenarios.� Analysis suggests that the economic impact of a repeat of the 1957 or 1968 pandemics, allowing for school closures, would be short lived, constituting a loss of 3.35% and 0.58% of GDP in the first pandemic quarter and year respectively.� A more severe scenario (with more than 1% of the population dying) could yield impacts of 21% and 4.5% respectively.� The economic shockwave would be gravest when absenteeism (through school closures) increases beyond a few weeks, creating policy repercussions for influenza pandemic planning as the most severe economic impact is due to policies to contain the pandemic rather than the pandemic itself.� Accounting for changes in consumption patterns made in an attempt to avoid infection worsens the potential impact.� Our mild disease scenario then shows first quarter/first year reductions in GDP of 9.5%/2.5%, compared to our severe scenario reductions of 29.5%.� These results clearly indicate the significance of behavioural change over disease parameters.
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Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 431.
Date of creation: 01 May 2009
Date of revision:
Pandemic; Influenza; Simulation; COMPACT;
Other versions of this item:
- Marcus R. Keogh-Brown & Simon Wren-Lewis & W. John Edmunds & Philippe Beutels & Richard D. Smith, 2010. "The possible macroeconomic impact on the UK of an influenza pandemic," Health Economics, John Wiley & Sons, Ltd., vol. 19(11), pages 1345-1360.
- E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-23 (All new papers)
- NEP-CMP-2009-05-23 (Computational Economics)
- NEP-HEA-2009-05-23 (Health Economics)
- NEP-MAC-2009-05-23 (Macroeconomics)
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