What Economic Effects Do Travel Bans Have on the United States Economy?
Demographic restructuring caused by the Black Death in the fourteenth century, for example, fostered the possibility of new economic growth by leaving the attenuated population in Europe with substantially more resources to exploit. All else being equal, a disease that kills only the elderly or infirm can even have the perverse effect of raising the GDP per capita, provided that those at the most productive ages survive. But there are fewer people in total to share the wealth. How the economic impact will unfold to a large extent is decided by the nature and the trajectory of COVID-19 if it becomes a pandemic, which seems increasingly likely.
As quantitative assessment of the effectiveness of travel restrictions in pandemic situations tends to be more challenging, there are scarce data on this topic. In any meta-analysis of surveillance data from multiple studies, it is difficult to quantify and compare the effectiveness of travel restrictions because such interventions are frequently implemented with other countermeasures and without following standardized protocols. However, mathematical models can be used to predict the effectiveness of each type of intervention and inform policy-makers at national and international levels. In 2009, a systematic review of studies based on such models revealed limited evidence of the effectiveness of restrictions in air travel – within and between countries – in the containment of pandemic influenza (International Health Regulations, 2005).
The decline in global equity markets and flight from risk—investors selling assets such as high-yield bonds and volatile stocks—exposes investors who have underpriced risk. Concern about counterparty risk accelerates the decline and dries up liquidity in financial markets. Central banks scramble to manage the problem. Financial markets—and the global economy—recover after a V-shaped recession.
WHO interim protocol: rapid operations to contain the initial emergence of pandemic influenza. Geneva: World Health Organization; 2007.
Pandemic influenza preparedness and response – a WHO guidance document. Geneva: World Health Organization; 2009.
International Health Regulations (2005). Geneva: World Health Organization; 2008.