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Modeling the Macroeconomic Effects of Disease: Extension and Application in the context of Senegal

Author

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  • Pape Yona Boubacar Mane

    (Université Gaston Berger, Saint-Louis)

  • Abdoulaye Diagne

    (Consortium pour la recherche économique et sociale, Dakar)

  • Yao thibaut Kpegli

    (Université Lumière Lyon 2, GATE UMR 5824, Ecully)

Abstract

Despite the fact that the low- and middle-income countries that are most affected by the Non-communicable diseases have a net capital inflows-to-GDP ratio that represents a significant part of the investment rate, the existing models that quantify the economic burden of disease do not account for the fact that the diseases affect the nets capital inflows-to-GDP ratio. This paper proposes a framework for the analysis of the macroeconomic impact of non-communicable diseases, building upon a Solow-style model. It additionally accounts for i) the fact that the diseases affect the nets capital inflows-to-GDP ratio through the interest rate differential and ii) the education pertaining to the efficiency of labor alongside experience and morbidity. We have applied our methodology to the context of Senegal. The total losses associated with non-communicable diseases over the period 2015--2035 amount to US$ 23 billion. Without taking into consideration the influence of diseases on net capital inflows-to-GDP ratio, total losses will be underestimated by 2.63 %. Without taking account of education in the earning function, total losses will be overestimated by 2.54 %.

Suggested Citation

  • Pape Yona Boubacar Mane & Abdoulaye Diagne & Yao thibaut Kpegli, 2019. "Modeling the Macroeconomic Effects of Disease: Extension and Application in the context of Senegal," Economics Bulletin, AccessEcon, vol. 39(4), pages 2904-2912.
    • Handle: RePEc:ebl:ecbull:eb-19-00696
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    References listed on IDEAS

    as
    1. David E. Bloom & Dan Chisholm & Eva Jane-Llopis & Klaus Prettner & Adam Stein & Andrea Feigl, 2011. "From Burden to "Best Buys": Reducing the Economic Impact of Non-Communicable Disease in Low- and Middle-Income Countries," PGDA Working Papers 7511, Program on the Global Demography of Aging.
    2. Abdoul A. Ndiaye & Mamadou A. Konte & Yao T. Kpegli, 2017. "The Solow model augmented with the net capital inflows to-GDP-ratio," Economics Bulletin, AccessEcon, vol. 37(3), pages 2020-2029.
    3. Berlemann, Michael & Wesselhöft, Jan-Erik, 2012. "Estimating Aggregate Capital Stocks Using the Perpetual Inventory Method – New Empirical Evidence for 103 Countries –," Working Paper 125/2012, Helmut Schmidt University, Hamburg.
    4. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    5. Bloom, David E. & Chen, Simiao & Kuhn, Michael & McGovern, Mark E. & Oxley, Les & Prettner, Klaus, 2020. "The economic burden of chronic diseases: Estimates and projections for China, Japan, and South Korea," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    6. Bloom, David E. et.al., 2013. "Economic impact of non-communicable disease in China and India: Estimates, projections and comparisons," Working Papers 300, Institute for Social and Economic Change, Bangalore.
    7. Damien Echevin & Fabrice Murtin, 2009. "What Determines Productivity in Senegal? Sectoral Disparities and the Dual Labour Market," Journal of Development Studies, Taylor & Francis Journals, vol. 45(10), pages 1707-1730.
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    More about this item

    Keywords

    Non-communicable Diseases; Aggregate output; Economic impact; Net capital inflows-to-GDP ratio; Human capital; Earning function; Senegal;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • I1 - Health, Education, and Welfare - - Health

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