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The Macroeconomic Impact of HIV/AIDS in Botswana

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  • Silvia Sgherri
  • Maitland MacFarlan

Abstract

This paper provides an overview of the potential macroeconomic effects of HIV/AIDS in Botswana, focusing on the key channels through which the pandemic is likely to affect the economic outlook and on the uncertainties involved. To estimate the impact of HIV/AIDS, a dual-economy equilibrium model is constructed and simulated under different scenarios. Depending on exactly how AIDS affects the outlook, GDP growth is projected to fall from around 5½ percent a year without the pandemic to between 1½ and 2½ percent a year with AIDS. Non-negligible redistribution effects across sectors and labor skill categories are also likely to arise. Finally, the paper draws attention to the potential effects of HIV/AIDS on the long-term fiscal position of Botswana, highlighting the need for increased international support and/or lower drug prices so that the widespread introduction of anti-retroviral drug treatments is feasible.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 01/80.

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Length: 42
Date of creation: 01 Jun 2001
Date of revision:
Handle: RePEc:imf:imfwpa:01/80

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Keywords: Economic growth; aids; informal sector; hiv/aids; hiv; health spending; health care; public spending; health care costs; medical insurance; capital intensity; health care spending; hiv infection; health sector; public health; medical costs; age structure; medical consumption; medical expenditure; epidemics; premature death; pharmaceutical companies; bulk of health spending; infection rate; demand-side effects; public expenditure; moral hazard problems; healthcare spending; aids epidemic; moral hazard; financial risks; negative effects;

References

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  1. Cuddington, John T, 1993. "Further Results on the Macroeconomic Effects of AIDS: The Dualistic, Labor-Surplus Economy," World Bank Economic Review, World Bank Group, vol. 7(3), pages 403-17, September.
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Citations

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Cited by:
  1. Markus Haacker, 2002. "Modeling the Macroeconomic Impact of HIV/AIDS," IMF Working Papers 02/195, International Monetary Fund.
  2. Cogneau, Denis & Grimm, Michael, 2002. "AIDS and Income Distribution in Africa. A Micro-simulation Study for Côte d'Ivoire," Economics Papers from University Paris Dauphine 123456789/4567, Paris Dauphine University.
  3. John Anyanwu & Ejikeme Okonkwo & Yaovi Gassesse Siliadin, 2012. "Working Paper 148 - Role of Fiscal Policy in Tackling the HIV/AIDS Epidemic in Southern Africa," Working Paper Series 380, African Development Bank.
  4. Nicolas Couderc & Nicolas Drouhin & Bruno Ventelou, 2006. "SIDA et croissance économique : le risque d'une « trappe épidémiologique »," Revue d'économie politique, Dalloz, vol. 0(5), pages 697-715.
  5. Robalino, David A. & Jenkins, Carol & El Maroufi, Karim, 2002. "Risks and macroeconomic impacts of HIV/AIDS in the Middle East and North Africa : why waiting to intervene can be costly," Policy Research Working Paper Series 2874, The World Bank.
  6. Scott McDonald & Jennifer Roberts, 2004. "Aids and Economic Growth: A Human Capital Approach," Working Papers 2004008, The University of Sheffield, Department of Economics, revised Aug 2004.
  7. Kenneth Harttgen, 2007. "The Impact of HIV on Children´s Welfare," Ibero America Institute for Econ. Research (IAI) Discussion Papers 157, Ibero-America Institute for Economic Research.
  8. Louise Roos, 2013. "Modelling the impact of HIV/AIDS: A literature review," Centre of Policy Studies/IMPACT Centre Working Papers g-233, Victoria University, Centre of Policy Studies/IMPACT Centre.
  9. Joana Godinho & Thomas Novotny & Hiwote Tadesse & Anatoly Vinokur, 2004. "HIV/AIDS and Tuberculosis in Central Asia," World Bank Publications, The World Bank, number 15061, October.
  10. Vijay P. Ojha & Basanta K. Pradhan, 2006. "The Macro-Economic and Sectoral Impacts of HIV and AIDS in India," Macroeconomics Working Papers 22134, East Asian Bureau of Economic Research.

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