A worst-case pandemic similar to the 1918 Spanish Flu could kill 96,000 Australians and cost the global economy $US9.2 trillion.

The analysis, by Professor Warwick McKibbin and PhD student Roshen Fernando at the ANU's Crawford School of Public Policy, builds on Professor McKibbin's modelling of the economic impact of SARS pandemic and the 2006 flu pandemic.

The pair model seven scenarios, but caution the probabilities and range of alternatives are highly uncertain.

"In the case where COVID-19 develops into a global pandemic, our results suggest that the cost can escalate quickly," they write.

"A range of policy responses will be required both in the short term as well as in the coming years."

A low-end pandemic, similar to a Hong Kong flu, assumes 10 per cent of the population is infected, with 2 per cent of infected people dying.

The worst case is a pandemic that infects 30 per cent of the population, with a case fatality rate of 3 per cent.

In the low-end scenario, there would be 2.79 million deaths in China, 236,000 in the US, and 21,000 in Australia. That compares to 55,000 deaths a year from the flu in the US. Worldwide, 15.2 million deaths would be expected.

That would knock $US2.33 trillion from the global economy and $27 billion from Australia's GDP.

The high-end Spanish flu scenario anticipates 12.57 million deaths in China, 1.06 million deaths in the US, and 96,000 deaths in Australia. Worldwide, the worst-case scenario would mean 68.3 million deaths, and slice $US9.17 trillion from the global economy. This scenario would cut $US103 billion from Australia's GDP.

The pair take in shocks to labour, including 14 days off work for people infected and for carers, shocks to government spending, as governments spend more on health and on screening at borders, and shocks to consumption and production, including air and sea transport.

"In the short term, central banks and treasuries need to make sure that disrupted economies continue to function while the disease outbreak continues," they say.

"In the face of real and financial stress, there is a critical role for governments. While cutting interest rates is a possible response for central banks, the shock is not only a demand management problem but a multifaceted crisis that will require monetary, fiscal and health policy responses."

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Quarantining people and limited big events could reduce the extent of contagion and the cost.

But even a contained outbreak could significantly impact the global economy in the short run.

"These scenarios demonstrate the scale of costs that might be avoided by greater investment in public health systems in all economies but particularly in less developed economies where health care systems are less developed and population density is high."

The pair also point to the fear of an unknown deadly virus which had a similar psychological impact to fear of terrorism, including biological terrorism. A large number of people would feel at risk, even if their actual risk of dying was low.