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The Macro-Economic and Sectoral Impacts of HIV and AIDS in India

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  • Vijay P. Ojha

    (NCAER)

  • Basanta K. Pradhan
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    Abstract

    The adverse economic impact of HIV and AIDS occurs at three levels : the individual/household, sector, and national or macro-levels. In the early phase of the epidemic, the impacts at the sector and macro-levels are rather mild and, hence, not easily measurable or quantifiable. So far in India, given the low overall prevalence, the focus has been on the effects at the level of the individual and the household. The enlisted study, by Pradhan, Sundar and Singh (2006)1 also focuses on the impact of HIV and AIDS on affected households, which it finds to be seriously adverse, and, therefore, a matter of acute concern. At the same time, the study underplays the adverse economywide impact of AIDS. Given the current prevalence rate, the extrapolation of the household-level impact to the level of the state or the national economy does not reveal a large macro-economic impact. But, this is because the survey, on which the study is based, captures the snapshot of the economy at a given point of time, while the question of the macroeconomic impact of AIDS is essentially a dynamic one. As the HIV epidemic unfolds, its impacts are bound to be deeply compounded. These impacts cannot be assessed in their totality by a mere extrapolation of the household level impact. Furthermore, in 2005, the number of HIV-infected persons exceeds 5 million, and this number is expected to quintuple to between 20 million and 25 million by 2010. With that kind of a jump in the number of HIV cases in the next 5-10 years, there is bound to be a visible impact on the national economy. At present, little or nothing is known about the potential macro-economic impact of HIV and AIDS on the Indian economy. The rough-and-ready estimates of the macro-economic costs of AIDS that are available are of no help in guiding and accelerating the response of the Government of India to the potential threat to the economy imposed by this epidemic. A quantitative assessment of the macro-economic impact of AIDS on the Indian economy, therefore, needs to be undertaken urgently to assist the policy makers. Keeping this in mind, the study analyses the macro-economic and sectoral impacts of HIV and AIDS in India, using a fivesector computable general equilibrium (CGE) model.

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    Bibliographic Info

    Paper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number 22134.

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    Date of creation: Jan 2006
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    Handle: RePEc:eab:macroe:22134

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    Related research

    Keywords: HIV; AIDS; macroeconomic impact of AIDS; computable general equilibrium;

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    References

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    1. Bloom, David E. & Mahal, Ajay S., 1997. "Does the AIDS epidemic threaten economic growth?," Journal of Econometrics, Elsevier, vol. 77(1), pages 105-124, March.
    2. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    3. Abigail Barr, 1995. "The missing factor: entrepreneurial networks, enterprises and economic growth in Ghana," Economics Series Working Papers WPS/1995-11, University of Oxford, Department of Economics.
    4. Xavier Sala-i-Martin, 1996. "Transfers, Social Safety Nets, and Economic Growth," IMF Working Papers 96/40, International Monetary Fund.
    5. Martin, Philippe & Rogers, Carol Ann, 1997. "Stabilization Policy, Learning-by-Doing, and Economic Growth," Oxford Economic Papers, Oxford University Press, vol. 49(2), pages 152-66, April.
    6. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, October.
    7. Silvia Sgherri & Maitland MacFarlan, 2001. "The Macroeconomic Impact of HIV/AIDS in Botswana," IMF Working Papers 01/80, International Monetary Fund.
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