VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

[Laidback Al]

<TABLE style="DIRECTION: ltr" width="100%" border=0><TBODY><TR><TD>Economists Use Computer Models to Size up Costs of Pandemic Flu</TD></TR><TR><TD vAlign=top>By Rosanne Skirble
Washington DC
27 October 2006


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</TD></TR><TR><TD class=imagecaption>Bird Flu Virus</TD></TR></TBODY></TABLE>Health experts fear that a major influenza pandemic could kill millions of people worldwide and cripple the global economy. Since 2003, the highly pathogenic H5N1 virus has spread to nine countries, largely in Asia and Africa. It has wreaked havoc on the poultry industry and killed 150 people. But should the virus mutate and spread more easily among humans, the consequences are difficult to predict.
What plans should a country make and how can a nation prevent widespread death and economic collapse? New computer models based on a history of 20th century pandemics are helping to answer those questions.
<TABLE class=APIMAGE style="DIRECTION: ltr" width=130 align=left><TBODY><TR><TD></TD></TR><TR><TD class=imagecaption>Joshua Epstein uses computer models to simulate economic costs of avian flu pandemic</TD></TR></TBODY></TABLE>Brookings Institution economist Joshua Epstein works with a specialized information network known as MIDAS, short for Modeling of Infectious Disease Agent Study.
He says its computer models - a project of the National Institutes of Health - provide an orderly framework in which to understand how global pandemics play out in the real world. "We need models to try to capture the global flow of people by air and other means, the transmission within large cities, and we can calibrate these models to historical cases. We can reconstruct true epidemics in these models and claim some credibility for them" says Joshua Epstein.
Since 2004, the MIDAS network has been focused on an outbreak of pandemic influenza in Southeast Asia. Its findings show that a variety of public health strategies -- including distribution of antivirals, school closings and quarantine -- if implemented early - could contain an outbreak at its source.
Warwick McKibbin with the Lowy Institute for International Policy in Australia has developed another model that explores the effect a flu pandemic would have on the global economy. He says spread of the deadly H5N1 virus would lead to a number of severe economic shocks. "When people get sick or die, the labor supply changes. That disrupts production," he says and adds, "industry has to take some sort of action and that usually raises cost." McKibbin says the models must also account for changes in people's behavior. "They will stop going to open areas where they may interact with infected people. They shift what they spend, where they spend. They stay at home more often," he says.
McKibbin says that in terms of gross domestic product, or G.D.P., a global pandemic could spark staggering economic losses. "For the U.S. - .6% of GDP (Gross Domestic Product) - for the mild case, for the world .8% of GDP."
That's approximately 330 billion dollars in lost economic output. McKibbin says as the scale of the pandemic increases, so do the economic costs. "For the most severe - the ultra scenario - we had over 4.4 trillion dollars wiped off the world economy, 140 million people killed."
McKibbin says developing countries would be hardest hit. "They don't have the capacity to respond. Their conditions ? density of populations, living conditions, health systems are unable to respond. And these are the countries that don't have the economic resources to prevent an economic outbreak in their own economies."
McKibbin says the enormous cost of a global pandemic raises the question whether enough is being spent to prevent an outbreak. "I don't think we are. We certainly are not spending enough in developing countries in public health systems, for example. Because by the time this pandemic influenza breaks out and most likely breaks out in Asia, you can't stop it at the border."
McKibbin says based on his model, the resources needed to contain the spread of avian influenza are far less than the costs that will be incurred after a pandemic strikes.

from: http://www.voanews.com/english/AmericanLife/2006-10-27-voa41.cfm
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[gsgs]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

we know, there is no "most severe" scenario. It can even be worse.

The 140 million deaths, that's not even that what would correspond to
1918. Given the current population, 1918 would be twice as many
deaths, so $8.8 trillion . And that is not the upper limit.

$8.8 trillion is almost the US-debt which was built over decades.
If US-economy is almost one quarter of world economy,
that's 2.2 trillion for USA in a 1918-like scenario.

Could this be handled or would it result in some distrust
of US-debt and panic sell out of US-bonds ?
What with countries of lower credibility ?

I mean, it is assumed that interest rates will go down in a pandemic,
but when it is very severe then the debt will collapse.
So, where is that point ?

 

[GaudiaRay]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

The MIDAS program may be termed a fiasco. It set up a model based on a Thai town. It concluded that if identified quickly, the cluster could be tamped out or down via a Tamiflu blanket. It was totally unrealistic. The people who ran away in Karo and who hid and refused to take Tamiflu are the tip of the reality iceberg.

It's one thing to live in LaPuta Land (tip of hat to Oliver Swift) and be a thinking head. It's another to look at reality.

This man's projection, as gsgs says, is way off mark. In FT, about a year ago, I did a pencil out of what I believe the cost of a 1/6 of the world's population dying to be. That cost is (not may be, not it'll never happen) going to be ONE QUARTER OF ONE QUADRILLION DOLLARS...250 TRILLION BUCKS...assuming there will be no inflation and no fiat money collapse.

When someone shows me that the first world will not stop working, that as has already been stated officially publicly probably 40% of all businesses will close and of those 40% won't reopen), that the collapse of the supply chain will be long, long, long lasting, that world trade will be suspect for at least four years, that we can just get up after being knocked down, brush ourselves off, and pretend it didn't happen...as every business continuity seminar must and does represent, I'll be ready to modify my perception of reality.

When the NY Life actuary said to me in MN in February, that NY Life may be one of the few insurance companies to survive and that just barely, I wonder what this MIDAS professor is using for his reality check.

 

[gsgs]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

with 1/6 of the world population dead you would get $35 trillion
loss with that model, assuming it's linear, which probably it isn't.
Your 250 trillion looks somehow inflated...

 

[GaudiaRay]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

with 1/6 of the world population dead you would get $35 trillion
loss with that model, assuming it's linear, which probably it isn't.
Your 250 trillion looks somehow inflated...

You're not considering the loss of revenues that run through the entire world.
If you use their model, no matter how "sound", you're doing garbage in, garbage out. They did it in Thailand. If you don't look, and I mean "look", at what the impact will be, you'll be holding onto probably worthless fiat.

When the public drops confidence, the markets skid. Watch the US markets now that the Demo's will be in charge. Watch confidence fall. The dollar is at 85.03; oil's up again to $61.25; gold's at 635. The Republican enrich the upper class game is going away as of today.

I wouldn't respect this man's next attempt; he failed and he failed to mention that. MIDAS was a pig feed for the academics. The results are now unuseable for doormats as they're on slippery paper.

 

[GaudiaRay]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

I'm gonna edify all here once and never again on this topic.
That whatever trillion bucks of academically calculable loss fails to recognize this obvious fact: this virus kills young people. Their loss of productive income is as real as the air you breathe. When you factor them in, discounted to whatever's a reasonable number, you see the losses are staggering beyond staggering. The loss of 60% of the 60% of the young people who will get sick, will be shocking and financially costly.

Ah, but let's not consider that impact. That's academic, huh?

As I said, if you don't "look" at what will happen, you get garbage in and garbage out.

The loss of those kids and their earning and spending power is like taking 1/2 of the next year's economy and the years after and making them go into MIDAS heaven.

If you'd like a lesson in history, think 1929 and the Great Depression. You're probably unaware what it was really like to live during those times. Heigh thee to a library and read the first hand reports. This pandemic will be no different. Nuthin' to do. That's what's coming. And according to GR's HERCULES MODEL, the loss of those young people and their being idle are not merely immediate costs; they're the multipliers that drive the number to ONE QUARTER QUADRILLION DOLLARS.

 

[sharon sanders]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

gsgs - Please read: Marsh McLennan's Assessment of Global Risk for 2006 Affects World Markets

"A conflation scenario for H5N1
New pandemics such as SARS (before its emergence) and human variants of avian flu lie on the continuum between unknown (u) and unknowable (U) risks. Unlike human flu or animal foot and mouth disease ? where it is known that outbreaks will reoccur and past experience provides a reasonably
accurate guide as to their impact ? new viral diseases evolve and cause death and secondary economic damage in unpredictable ways. Global interconnectivity has vastly increased the opportunities for the emergence and rapid transmission of disease and the myriad linkages in the global economy enable systemic economic, social and political contagion as well.

The following is a brief sketch of the possible conflationary impacts of a major human outbreak.
Several cities in East Asia suffer major outbreaks of human-to-human transmission. International travel is severely affected, pandemic-specific vaccine supplies are secured and security authorities prepare for external contingencies and domestic insurgency. Emergency supply chain management is instituted, based on the possibility that 50% of those infected die. Commodities and services needed to survive for one to three years are identified. Non-critical industries reduce output or close. Even with full-scale vaccine production in nine countries with 12% of the global population, fewer than 500 million people (14% of the world?s population) can be vaccinated in a year.

An outbreak of H5N1 human-to-human transmission could have devastating impacts globally across all social and economic sectors, disrupting efficient processes, severely degrading response capabilities and exacerbating the effects of known weaknesses in different systems. These impacts might include: the disruption of supply chains and trade flows; an exacerbation of financial imbalances and the transformation of intellectual property regimes for pharmaceutical products; rioting to gain access to scarce supplies of antivirals and vaccines; a collapse of public order; partial de-urbanization as people flee population centres; the extinction of trust in governments; decimation of specific human skill sets; and forced, large-scale migration, associated with the further collapse of already weak states.
In such a scenario, the impact on society might be as profound as that which followed the Black Death in Europe in 1348. That plague caused a fundamental transformation of socio-economic relations in Europe. The deaths of an estimated one third of the European population of the time created a shortage of labour, undermining an economy based on serfdom, and effecting a shift in the relative values of capital and labour. Scarcity of labour resources brought about a wage-based economy in which the value of skills was efficiently priced....

http://www.flutrackers.com/forum/showthread.php?t=5&highlight=marsh

 

[GaudiaRay]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

gsgs - Please read: Marsh McLennan's Assessment of Global Risk for 2006 Affects World Markets

http://www.flutrackers.com/forum/showthread.php?t=5&highlight=marsh

Maybe Marsh has a job opening for someone who said it first? Gosh, I want the big fiat bucks while they're useful, too. Whatcha think they charged for this report? GSGS, I could sell you one of my reports, cheap...under a hundred grand.

 

[DRJJ]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

I recently read mitochondrial research on Jews. Mitochondria travel exclusively from the female parent All jews (not sure if it all European Jews or All Jews) descend from 6 females. That's the real worse case scenario.....

Sorry for the lack of a reference, but we are so far out there at that point that I don't think it matters....

 

[GaudiaRay]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

There's no information I've heard of which assigns descendents from one tribal group compared to others as being favored with susceptibility to H5N1.

The Jews may be "chosen" but apparently not exclusively, primarily or firstly for bird flu.

 

[Sally Furniss]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

DRJJ,

I believe you are refering to the mitochondrial eve. She is not restricted to Jews.

http://en.wikipedia.org/wiki/Mitochondrial_Eve

"Mitochondrial Eve (mt-mrca) is the name given by researchers to the woman who is the matrilineal most recent common ancestor for all living humans; the mitochondrial DNA (mtDNA) in all living humans is derived from hers. Mitochondrial Eve is the female counterpart of the Y-chromosomal Adam, the patrilineal most recent common ancestor.

The holder of this title is believed by some to have lived about 150,000 years ago in what is now Ethiopia, Kenya or Tanzania. The time she lived is calculated based on the molecular clock technique of correlating elapsed time with observed genetic drift"

 

[Gnosis]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

The models may be useful for those folks that have no clue what the economic fallout could potentially be. It may cause some in the industrialized world to take notice of the looming global chaos. These predictive models are so limited by assumption (GIGO) that they are useless for those of us who watch and wait.

 

[Laidback Al]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

Welcome to FluTrackers, Gnosis.

 

[gsgs]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

what's McLennan's reputation ? Any acknowledged people support this ?
Any acknowledged people reviewed+approved GR's 250 Trillion ?

Also, you often hear that economy will recover quickly.
This was the case in 1918, when one decade of profound
growth followed. (except in Germany, well...)

 

[GaudiaRay]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

Wallop of flu played down
U.S., Europe can curtail economic effect, study says
http://www.ajc.com/business/content/printedition/2006/11/11/meshbizflu1111a.html

By Jeff Nesmith
Cox Washington Bureau
Published on: 11/11/06 Washington ?- A computer model of an "ultra severe" flu pandemic shows it would leave more than 140 million people dead worldwide and cost the global economy more than $4 trillion ?- but that its effect on the economies of the United States and Western Europe would be relatively mild.
In fact, Australian economist Warwick McKibbin said his model of the way different economies respond to a pandemic suggests that capital investment in the United States and Europe will grow as investors flee less secure economies.
<!--endtext--><!--endclickprintinclude--><table align="left" border="0" cellpadding="2" cellspacing="0" width="175"></table><!--startclickprintinclude--><!--begintext--> The model contradicts some predictions that a pandemic could plunge the world's economy into a major depression.
Another computer model, being developed by the National Institutes of Health, suggests that by closing its airports to international flights, the United States could "buy" a few weeks of time to prepare for a pandemic.
The number of American deaths could be dramatically reduced if pandemic preparation plans are put into effect and work is begun on developing a targeted vaccine, according to the NIH's Models of Infectious Disease Agent Study program.
McKibbin, an economic modeler and professor of international economics at the Australian National University, described his projections of the economic impact of an influenza pandemic recently at the Brookings Institution here.
The model computed the effects on different economic sectors ?- energy, mining, agriculture, services and two types of manufacturing ?- in 20 separate countries and economic regions.
He said he assumed four different pandemic scenarios:
> Mild, patterned after the 1968 "Hong Kong flu" outbreak that is believed to have killed around 700,000 people worldwide.
> Moderate, based on the 1957 pandemic that is estimated to have killed from 1 million to 2 million people.
> Severe, much like the lowest estimates of the severity of the "Great Flu'' pandemic of 1918-19, from 25 million to 50 million deaths.
> "Ultra," a pandemic that spreads and kills as fast as the highest estimates ?- up to 100 million deaths ?- of the 1918-19 pandemic.
A mild pandemic would cost the world 0.8 percentage points of total gross domestic product, or about $330 billion, he said.
An ultra pandemic would cause recessions in the developed world, cutting gross domestic product by 5.5 percent in the United States and 8 percent in Europe, he said. The model did not estimate a monetary value for those drops.
The model showed a pandemic would hammer developing countries much harder. The GDP of Indonesia would drop by 18 percent. Output in Singapore would shrink by 22 percent, in the Philippines by 38 percent and in Hong Kong by 54 percent, he said.
In addition to killing 142 million people, such a pandemic would cut global output by $4.4 trillion.
McKibbin's studies assumed an emerging influenza strain would attack 30 percent of the population, which is similar to the "attack rates" of all three 20th-century pandemics. The difference in severity would depend on the virus' lethality.
For different countries, McKibbin programmed such variables as how easily the influenza virus might enter each country, how well national health policies could respond, and how different financial and labor markets would be affected.
For instance, a pandemic might cause significantly greater job absenteeism in the United States than in Thailand, as working parents in the U.S. stay home to take care of sick kids.
Joshua Epstein of the National Institutes of Health said the MIDAS model was developed around the 1968 pandemic, using new transportation data that reflects the modern prevalence of air travel.
Then a factor epidemiologists refer to as "R-naught" ?- a measurement of how many others each influenza victim would infect ?- was plugged in.
"If I take a 'container' full of susceptible people moving around and I drop a single infected person into that container, how many will that person give the bug to?'' he said. "If the answer is less than one, the thing fizzles.
"If it's more than one, it spreads. If it's three, it spreads very fast."
Epidemiologists believe the R-naught for the 1918 flu pandemic was between 1.5 and 2.0, he said.
The MIDAS model indicates unrestrained air transportation could cause 400 million cases of disease from such a virus, he said.
Global human travel restrictions would delay global propagation of the virus around three weeks, "and give you time to do intelligent things, like start developing a vaccine,'' he said.
Blocking air travel from affected countries was found to be effective at delaying the pandemic, Epstein said. "You are buying enough time ... to develop and distribute vaccine and do social distancing and all the other intelligent things you could do; you get a huge depression in the number of cases."
The "National Strategy for Pandemic Influenza," released in May by the White House Homeland Security Council, noted the potential value in restricting entrance into the United States and said additional study of this strategy was needed.

 

[GaudiaRay]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

When anyone tells me that they have a guaranteed way to achieve immediate, very wide spread, nearly 100% self-enforced, self-monitored protective sequestration, then I'll immediately accept the logic of the modelers.

Not only will there be massive minority percentages of the population who are disbelievers, and who believe they can miss the silver bullet, but as long as there are people who in total innocence take what they think to be reasonable risk (like visiting a neighbor and in doing so, open their door, step inside, take a breath, and hear them say that their child just got sick, that their spouse's co-worker just got sick, and that they should leave, or they don't even learn that much, and then don't wash their hands), making that person now a prospective carrier and infected to boot.

These wonderful spills of money to support academics like Mc this and Mac that do absolutely nothing to address the root cause of the spread of influenza. What they do is tell us that if everyone is good and obeys completely and compliantly we can drop the RO to below 1 and thus tamp the rate or even fizzle the pandemic.

Worse, the belief that 3 weeks is a meaningful "stall" of the pandemic, allowing people to prepare themselves is foolish and arrogant, besides being well out of touch with human behavior and its reality.

Sorry folks. I have a craw in my gullet and I will not defer to the pile of paper when it does zero to address the true motivations of humans.

And just to support my statement, in the US, the Sect'y of HHS and his senior staff visited every state in the Union telling them "get ready; you're gonna be on your own." And guess what? 6 months to 1 year later, you can't name more than 3 people outside of the FT/FC/FW crowd who have prepared by stocking 2 weeks of anything requested.

Yet these modelers really do enjoy their work. They generate "answers". NOT.

 

[Gnosis]

Re: VOA - Economists Use Computer Models to Size up Costs of Pandemic Flu

Thx for the welcome LA