Pandemic flu and the sick global economy

April 26, 2009
by Steve Perry

What would a world flu pandemic with moderate to high mortality mean for the global economy? In normal circumstances this would strike most people as a secondary question, but since economies around the world are already very sick themselves, the matter becomes more fraught and more urgent. Thanks to the lingering specter of bird flu in the past decade-plus, a number of organizations have assayed this question. The research is worth reviewing, but keep in mind that the answers are suspect for a couple of reasons: They're all over the map in their assessments, and the studies were all modeled on economies that were not in collapse.

The advocacy group Trust for America's Health estimated in 2007 that a flu outbreak comparable in virulence to the mother of all modern pandemics, the 1918 "Spanish flu," would by itself reduce GDP about 5.5 percent in the U.S. The World Bank has revised its own analysis of the global economic toll a few times since 2005; according to their latest estimate, chronicled by Bloomberg News in October 2008, "A flu pandemic could kill 71 million people worldwide and push the global economy into a 'major global recession' costing more than $3 trillion, according to raised estimates by the World Bank of a worst-case scenario."

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