So world markets have been hammered by the swine flu outbreak with airlines leading the charge. The New York Times reports that countries are now tightening their borders and the World Health Organisation has just upped its pandemic flu alert level. But how serious will it get? And what does it tell us about the fragility of the global economy?

Narayanan Viswanathan who now heads the global supply chain practice of Boston consulting firm Aberdeen Group has told BusinessWeek the dangers are overblown, although retail and airlines will suffer. People stop travelling and they stop eating out and gathering in public places.

At this stage, it's too early to say whether we are looking at a serious pandemic or not. But what's clear is that the biggest economic effect will come from people avoiding contact with potential flu sources, not from the flu itself.

And yes, the world did cope quite well and markets bounced back after the SARS and bird flu outbreaks. But then, the world economy was a lot stronger then.