What I Wrote for This Class in 2003 (Required Parts Are Highlighted)

I've been asking students in my advanced macro class to submit questions for a quodlibet for almost 20 years.

In 2003, the original SARS outbreak was in the news.

Here's what one student asked,† and what I answered.

How will the fear of exposure to the Severe Acute Respiratory Syndrome (SARS) affect trade with other countries and the U.S. economy?

Gosh ... I wish I had an answer for this one. Let's think about this in terms of polar cases. The worst case scenario is that this is a contagious disease, for which we have no immunity, which has a 4% death rate. So, we're talking 250 million deaths worldwide. In the best case, a vaccine can be developed quickly with few side effects, and the whole scary situation fizzles out.

I think that its pretty obvious that people are worried about that worst case scenario. Expectations of that scenario could have enormous effects on the world economy without it ever even taking place. Already we are seeing drops in travel to East Asia, recommendations that people avoid travel to Toronto, Beijing, and Hong Kong, empty hotels, closed universities, hospitals and schools, and so on. How much damage is that doing - I don't know, I've heard no estimates. Here's a ballpark figure: big natural disasters in developed countries do $20-100B in damage. The U.S. can shake that off, but Hong Kong, and other small but wealthy countries would be devastated. This probably bears a lot more attention than the Iraq war. On the other hand, don't blow it out of proportion. Only a few thousand people have had SARS so far. 

At the time this happened, we had zero experience with destructive epidemics. Ebola was like some urban myth we told about Africa. Anti-vaxxers were non-existent. China's economy was a tenth of its current size, and its politics seemed a lot cuddlier. 

A lot of what I knew about pandemics in early January came from thinking about this epidemic and discussing it in that class. We don't know yet whether COVID-19 is the worst case scenario, but it's certainly a worse case. And we're still hoping for a vaccine or a fizzle out.‡

I'm a little amazed at that ballpark estimate. Lee and McKibben [2004], which I sited this year in this post, later estimated the costs at $45B in Hong Kong and China combined. Also interesting that I wrote that this epidemic (which petered out by June) was probably more important than the war in Iraq. In a way, we can now see that it was.

Up until Fall 2014, that quote used to reside on my SUU webpage. Then the suits decided it would be a good idea to make it harder for professors to make scholarly use of the SUU website. It was buried down a few levels, but just sitting there if anyone searched for it.

† I remember this student well. Gotta' figure she'd be almost 40 now. Hope she's healthy and staying safe. And believe it or not, Jake Miller was in that class too.

‡ BTW: they still have not developed a successful and safe vaccine for the initial SARS. They've been trying for 17 years.