The Milken Institute Review Volume 9, Number 3

The Global Costs of an Influenza Pandemic

INTRODUCTION

The deaths of 187 people in 12 countries through May 2007 from Type A (H5N1) avian influenza has raised fears that bird flu could trigger the next influenza pandemic – perhaps even one on the scale of the Spanish flu that swept the world in 1918. While we are in some ways better prepared to deal with a public-health emergency on this scale than we were a century ago, the integrated nature of the global economy – the dependence on global markets for goods, services and capital – may leave us more vulnerable to a pandemic’s accompanying economic shocks. We can estimate the economic consequences of pandemics, based on computer simulations incorporating what we know about influenza transmission and the likely response by governments, as well as by markets.