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Does a Mature AIDS Epidemic Threaten Growth?

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Author Info
José Cuesta

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Abstract

This paper models the impact on economic growth of HIV/AIDS when the epidemic is in a mature phase, in contrast with previous studies focused on periods of expansion, as in African countries. Simulations for Honduras, the epicenter of the epidemic in Central America, show that AIDS is not likely to threaten economic growth through either labor or capital accumulation channels; impacts are estimated between 0. 007 and 0. 27 percent points of GDP growth annually for the period 2001-10. Likewise, increasing spending on prevention, public treatment subsidies and treatment access will not jeopardize economic growth prospects. Critical factors that slash economic growth in Africa (such as human capital reductions and shifts in relative skills) are not strong in Honduras.

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Paper provided by Inter-American Development Bank, Research Department in its series RES Working Papers with number 4567.

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Date of creation: Feb 2008
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Handle: RePEc:idb:wpaper:4567

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  1. Cuesta, Jose, 2006. "Political Space, Pro-Poor Growth and Poverty Reduction Strategy in Honduras," MPRA Paper 12354, University Library of Munich, Germany. [Downloadable!]
  2. Robalino, David A. & Voetberg, Albertus & Picazo, Oscar, 2002. "The macroeconomic impacts of AIDS in Kenya estimating optimal reduction targets for the HIV/AIDS incidence rate," Journal of Policy Modeling, Elsevier, vol. 24(2), pages 195-218, May. [Downloadable!] (restricted)
  3. Gonzalo Salinas & Markus Haacker, 2006. "HIV/AIDS: The Impact on Poverty and Inequality," IMF Working Papers 06/126, International Monetary Fund. [Downloadable!]
  4. Ainsworth, Martha & Over, Mead, 1994. "AIDS and African Development," World Bank Research Observer, Oxford University Press, vol. 9(2), pages 203-40, July.
  5. Arndt, Channing, 2006. "HIV/AIDS, human capital, and economic growth prospects for Mozambique," Journal of Policy Modeling, Elsevier, vol. 28(5), pages 477-489, July. [Downloadable!] (restricted)
  6. Bedi, Arjun S & Gaston, Noel, 1997. "Returns to Endogenous Education: The Case of Honduras," Applied Economics, Taylor and Francis Journals, vol. 29(4), pages 519-28, April. [Downloadable!] (restricted)
  7. Markus Haacker, 2002. "Modeling the Macroeconomic Impact of HIV/AIDS," IMF Working Papers 02/195, International Monetary Fund. [Downloadable!]
  8. Simon Dixon & Scott McDonald & Jennifer Roberts, 2001. "AIDS and economic growth in Africa: a panel data analysis," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(4), pages 411-426. [Downloadable!]
  9. 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. [Downloadable!] (restricted)
  10. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May. [Downloadable!] (restricted)
  11. S Nicholls & R Mc Lean & K TheodoreR Henry & B Camara & Team, 2000. "Modelling the Macroeconomic Impact of HIV/AIDS in the English Speaking Caribbean," South African Journal of Economics, Economic Society of South Africa, vol. 68(5), pages 405-412, December. [Downloadable!] (restricted)
  12. Meyer, S L & Lasser, M & Reekie, W D, 1994. "Economics and the Treatment of AIDS: A Preliminary Assessment," Applied Economics, Taylor and Francis Journals, vol. 26(11), pages 1093-98, November.
  13. Cuddington, John T. & Hancock, John D., 1994. "Assessing the impact of AIDS on the growth path of the Malawian economy," Journal of Development Economics, Elsevier, vol. 43(2), pages 363-368, April. [Downloadable!] (restricted)
  14. C Arndt & J D Lewis, 2000. "The Macro Implications of HIV/AIDS in South Africa: A Preliminary Assessment," South African Journal of Economics, Economic Society of South Africa, vol. 68(5), pages 380-392, December. [Downloadable!] (restricted)
  15. Joan-Ramon Borrell, 2007. "Pricing and patents of HIV/AIDS drugs in developing countries," Applied Economics, Taylor and Francis Journals, vol. 39(4), pages 505-518. [Downloadable!] (restricted)
  16. Bell, Clive & Bruhns, Ramona & Gersbach, Hans, 2006. "Economic growth, education, and AIDS in Kenya : a long-run analysis," Policy Research Working Paper Series 4025, The World Bank. [Downloadable!]
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