We attempt to apply a New Keynesian open economy model to simulate the economic consequences of influenza epidemic in Poland and measure the output loss (indirect cost) related to this disease. We introduce a negative health shock on the supply side of the economy and demonstrate that such a shock – implemented as a reduction in labour utilisation under unchanged labour cost – is not equivalent to negative labour supply shock. As expectational effects may hypothetically play a significant role in determining the economic cost of influenza, we attempt to endogenise the mechanism of epidemic in the model for the rational expectations solution algorithm to take account for the possibility of epidemic. This attempt has failed for the standard SIR model of epidemic and for the standard Blanchard-Kahn-like local solution methods, as the SIR block is only consistent with Blanchard-Kahn conditions under herd immunity of the population. In the deterministic simulation with the number of infected given exogenously, the output loss resulting from influenza-related presenteeism and absenteeism was estimated at 0.004% of the steady state level on average in the period 2000‒2013. The simulated indirect cost in the New Keynesian model has turned out to be lower than the estimates that one could possibly obtain using the human capital approach. The reason for this discrepancy is the demand-oriented construction of the New Keynesian framework, and we treat this result as closer in notion to what the friction cost approach might suggest.

In the management of human resources, the absences are monitored with Bradford Factor (BF) using the number and length of sick leaves. The sick leaves are also measured in health technology to assess the impact of health technologies on product loss, aka indirect cost (IC). Linking the BF and IC might promote BF as an outcome measure and facilitate the estimation of IC. We simulate a single company operation in several scenarios describing the firm's functioning and adjustments to workers' absence. We measure the BF and the IC due to absence and relate them with econometric modelling. Results show that BF and IC are associated in a non-linear way; hence, IC cannot be calculated from BF in a simple manner. The association is strongest for possibility to adjust to worker's absence, and a high elasticity of substitution between workers. Therefore, the possibility to proxy IC by BF is rather limited.