Most of the evidence indicates that the economic effects of the 1918 influenza pan-demic were short-term.

As mentioned earlier, the greatest disadvantage of studying the economic effects of the 1918 influenza is the lack of economic data.

The possibility of a worldwide influenza pandemic (e.g., the avian flu) in the near future is of growing concern for many coun-tries around the globe. The World Bank estimates that a global influenza pandemic would cost the world economy $800 billion and kill tens-of-millions of people.

Economic Effects of the 1918 Influenza Pandemic

it takes an additional 20 years for the natural rate to return to its original level.

A look at previous pandemics, going back to the Black Death in the 1300s, can help fill this gap by shedding light on their medium- to long-term economic effects.

low borrowing costs are associated with higher real wages and create ample room for governments to finance stimulus measures

prolonged period of depressed real interest rates

The COVID-19 pandemic’s toll on economic activity in recent months is only the beginning of the story.

The Long Economic Hangover of Pandemics

Beyond funding R&D, international collaboration could boost epidemic preparedness by supporting centralized stockpiling of vaccines and drugs that can be deployed where they are most needed.

There is a significant market failure when it comes to vaccines against individual low-probability pathogens that collectively are likely to cause epidemics.

Technological solutions can help minimize the burden of sizable outbreaks and epidemics

Countries should be ready to take initial measures to limit the spread of disease when an outbreak does occur.

Informal surveillance systems, such as ProMED and HealthMap, which aggregate information from official surveillance reports, media reports, online discussions and summaries, and eyewitness observations, can also help national health systems and international responders get ahead of the epidemiological curve during the early stages of an outbreak.

That list has since been updated twice, most recently in February 2018 (see table).

Perhaps the greatest challenge is the formidable array of possible causes of epidemics, including pathogens that are currently unknown.

Diseases can be transmitted rapidly, both within and across countries

Vulnerable populations, particularly the poor, are likely to suffer disproportionately, as they may have less access to health care and lower savings to protect against financial catastrophe.

Some sectors may even benefit financially, while others will suffer disproportionately.

Liberia, for example, saw GDP growth decline 8 percentage points from 2013 to 2014 during the recent Ebola outbreak in west Africa, even as the country’s overall death rate fell over the same period.

roughly $500 billion

Concern over the spread of even a relatively contained outbreak can lead to decreased trade.

enterprises, commercial establishments, transportation, and public services—all of which disrupt economic and other socially valuable activity.

driving down and disrupting productivity

A sizable outbreak can overwhelm the health system, limiting the capacity to deal with routine health issues and compounding the problem.

that have mutated or spilled over from animal reservoir

Epidemics and Economics