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The Macroeconomics of Targeting: The Case of an Enduring Epidemic

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  • Bell, Clive
  • Gersbach, Hans

Abstract

What is the right balance among policy interventions in order to ensure economic growth over the long run when an epidemic causes heavy mortality among young adults? We argue that, in general, policies to combat the disease and promote education must be concentrated, in certain ways, on some subgroups of society, at first to the partial exclusion of others. This concentration involves what we term the macroeconomics of targeting. The central comparison is then between programs under which supported families enjoy the benefits of spending on health and education simultaneously (DT), and those under which the benefits in these two domains are sequenced (ST). When levels of human capital are uniformly low at the outbreak, DT is superior to ST if the subsequent mortality rate exceeds some threshold value. Outside aid makes DT more attractive; but DT restricts support to fewer families initially and so increases inequality.

Suggested Citation

  • Bell, Clive & Gersbach, Hans, 2006. "The Macroeconomics of Targeting: The Case of an Enduring Epidemic," CEPR Discussion Papers 5714, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5714
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    References listed on IDEAS

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    Cited by:

    1. Maik T. Schneider & Ralph Winkler, 2010. "Growth and Welfare under Endogenous Lifetime," Diskussionsschriften dp1013, Universitaet Bern, Departement Volkswirtschaft.
    2. Josselin Thuilliez & Hippolyte d'Albis & Hamidou Niangaly & Ogobara Doumbo, 2017. "Malaria and Education: Evidence from Mali," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 26(4), pages 443-469.
    3. Jamsheed Shorish, 2007. "Welfare analysis of HIV/AIDS: Formulating and computing a continuous time overlapping generations policy model," The School of Economics Discussion Paper Series 0709, Economics, The University of Manchester.
    4. Karlsson, Martin & Nilsson, Therese & Pichler, Stefan, 2014. "The impact of the 1918 Spanish flu epidemic on economic performance in Sweden," Journal of Health Economics, Elsevier, vol. 36(C), pages 1-19.
    5. Fenichel, Eli P., 2013. "Economic considerations for social distancing and behavioral based policies during an epidemic," Journal of Health Economics, Elsevier, vol. 32(2), pages 440-451.
    6. Smith, Richard D. & Keogh-Brown, Marcus R. & Barnett, Tony, 2011. "Estimating the economic impact of pandemic influenza: An application of the computable general equilibrium model to the UK," Social Science & Medicine, Elsevier, vol. 73(2), pages 235-244, July.

    More about this item

    Keywords

    education support; epidemic diseases; health policies; HIV/AIDS; macroeconomics of targeting; poverty traps; single and double targeting;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I20 - Health, Education, and Welfare - - Education - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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