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I agree with the above post in that a true pandemic of a deadly strain of flu virus could lead to the worst case scenario described in the first post.
If you look at last year's Swine Flu scare, which some described as a pandemic, the economic effects were more subtle. According to the Centers for Disease Control in Atlanta, about 20 million Americans per year get the flu, and the disease takes between 3 - 5 days to run its course under normal circumstances. Assuming that even 60% of those infected are members of the workforce, we would be looking at 36 - 60 million lost work days. So one economic impact is that we lose productivity, and medical costs rise as a result of the illnesses.
Since government routinely provides or contracts for the production of vaccines, there is a significant up front cost to taxpayers to vaccinate even the most vulnerable people in our population, the young and the elderly.
The most likely economic impact of a truly bad pandemic would be severe. International trade could fall apart as could domestic economies.
I think that trade would be first to go assuming that the pandemic started it one particular area. Countries might close their borders to try to prevent the spread of the disease and that would disrupt trade.
Even if that did not happen, domestic economies would be hit hard. People would miss a great deal of work due to sickness or due to having to care for sick family members. If large numbers of workers died, that would curtail production as well. Finally, the fear that would go along with a pandemic would reduce morale in the population and would lead to a decline in confidence among consumers (so they would not really want to buy things).
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