An Economic Effect of Mexican Swine Flu

We've been hearing quite a bit about the recent outbreak of swine flu in Mexico over the last few days. According to what we've read so far, only 149 people have died in Mexico, with the forty-odd cases in the United States and Canada proving to be non-lethal. The knee-jerk reactionary nature of the Mexican Federal Government's actions (closing schools, pondering cancelling Cinco de Mayo, et cetera) is amusing to us, but we suppose it is not without good reason.

The last great influenza outbreak, in 1918 was quite a nasty episode, with up to a 50% infection rate and 5% mortality. If the Mexican swine flu does indeed prove even half as potent, a lot of people could become very dead very soon. We frankly don't expect this flu to be anything particularly deadly, as it seems to be already following the common path of viruses: a potently deadly burst at the beginning, with a rapid decay in lethality. This is evidenced by the lack of any fatalities from the flu outside of Mexico... and Mexico is not known for its sanitary qualities.

However, let's suppose that we're - gasp - wrong, and the Mexican flu is indeed the next deadly flu; we'll be reasonable, and further suppose that the Mexican swine flu is as potent as the Spanish flu (i.e. 50% infection rate, 5% mortality rate). Once this flu runs its theoretical course, about 162 million people will be dead world-wide.

This level of mortalities would have a very serious effect on an already-seriously-damaged world economy. Perhaps most immediately, the flu would help to foster the nascent protectionism which is seething just below the surface of international policy (but especially in the case of the United States and Russia). It is, of course, understandable for a nation to close its borders during a medical crisis, but if that were to happen in the near future it would be a very serious blow to international trade.