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Effects on the U.S. of an H1N1 epidemic: analysis with a quarterly CGE model

  • Peter B. Dixon
  • Bumsoo Lee
  • Todd Muehlenbeck
  • Maureen T. Rimmer
  • Adam Z. Rose
  • George Verikios

We simulate the effects of a hypothetical H1N1 epidemic in the U.S. 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.

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Paper provided by Victoria University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-202.

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Date of creation: Jun 2010
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Publication status: Published in Journal of Homeland Security and Emergency Management, vol. 7, iss. 1, 2010, article 75.
Handle: RePEc:cop:wpaper:g-202
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  1. Warwick McKibbin & Alexandra Sidorenko, 2006. "Global Macroeconomic Consequences of Pandemic Influenza," CAMA Working Papers 2006-26, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
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