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

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

Abstract

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.

Suggested Citation

  • Peter B. Dixon & Bumsoo Lee & Todd Muehlenbeck & Maureen T. Rimmer & Adam Z. Rose & George Verikios, 2010. "Effects on the U.S. of an H1N1 epidemic: analysis with a quarterly CGE model," Centre of Policy Studies/IMPACT Centre Working Papers g-202, Victoria University, Centre of Policy Studies/IMPACT Centre.
    • Handle: RePEc:cop:wpaper:g-202
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    References listed on IDEAS

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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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    More about this item

    Keywords

    Influenza epidemic; Quarterly CGE modelling;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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