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The Economic Impact of AIDS in Sub-Saharan Africa

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  • Azomahou, Theophile

    (UNU-MERIT)

Abstract

In this paper, a simple general equilibrium model à la Solow is developed to capture the impact of AIDS on economic growth. To this end, a benchmark model due to Cuddington and Hancock (1994) is extended in various directions. In particular, the sharply declining life expectancy patterns are clearly rejected in the enlarged model through a generic Ben-Porath mechanism. AIDS-related health expenditures are incorporated as well. Using up-do-date optimal forecasting methods, the model applied to South Africa shows that while a relatively short term assessment might not reveal any dramatic AIDS growth effect, the medium/long run impact can be truly devastating. In particular, the heavy trends in mortality and life expectancy currently induced by AIDS are shown to be potentially at least twice more detrimen-tal for per capita economic growth in the period 2020-2030 compared to 2000-2010.

Suggested Citation

  • Azomahou, Theophile, 2008. "The Economic Impact of AIDS in Sub-Saharan Africa," MERIT Working Papers 2008-038, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2008038
    as

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    File URL: https://www.merit.unu.edu/publications/wppdf/2008/wp2008-038.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Epidemics; Life Expectancy; Economic Growth; AIDS;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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