The Centre of Policy Studies (COPS) is a research centre at Monash University devoted to economy-wide modelling of economic policy issues.

Early 2009 saw the emergence of an H1N1 influenza epidemic in North America that eventually spread to become the first pandemic of the 21 st century. Previous work has suggested that pandemics and near pandemics can have large macroeconomic effects on highly affected regions; here we estimate what those effects might be for Australia. Our analysis applies the MONASH-Health model: a computable general equilibrium model of the Australian economy. We deviate from previous work by incorporating two important short-run mechanisms in our analytical framework: quarterly periodicity and excess capacity. The analysis supports the assertion that an H1N1 epidemic could have significant short-run macroeconomic effects but the size of these effects is highly dependent on the degree of inertia in the markets for physical capital and labour. JEL codes:C68, E37, I18

No abstract

We analyse the economic risks from two influenza pandemics that represent extremes along the virulence‐infectiousness continuum of possible pandemics: a high virulence–low infectiousness event and a low virulence–high infectiousness event. Our analysis involves linking an epidemiological model and a quarterly computable general equilibrium model. We find that global economic activity is more strongly affected by a pandemic with high infection rates rather than high virulence rates, all else being equal. Regions with a higher degree of economic integration with the world economy face greater risks of negative effects than less integrated regions.