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The Growth economics of epidemics

Author

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  • Raouf, BOUCEKKINE

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)

  • Bity, DIENE
  • Theophile, AZOMAHOU

Abstract

This paper examines in an endogenous growth theory perspective the mechanisms through which epidemics affect long term growth. Investment in both physical and human capital are key transmission variables in this respect. The paper distinguishes between Spanish flu like epidemics and AIDS like epidemics. Two-sector growth models are shown to better reflect the specific effects of epidemics. The effects of an AIDS like pandemic on savings and education effort are also modelled via life expectancy. The paper is closed by an extension of the celebrated Cuddington-Hancock model to account for the latter features. An application to the South African case is provided. The main finding points at a delayed effect of Aids on economic growth due to the recent sharp drop in llife expectancy in this country.

Suggested Citation

  • Raouf, BOUCEKKINE & Bity, DIENE & Theophile, AZOMAHOU, 2006. "The Growth economics of epidemics," Discussion Papers (ECON - Département des Sciences Economiques) 2006021, Université catholique de Louvain, Département des Sciences Economiques.
    • Handle: RePEc:ctl:louvec:2006021
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2006-21.pdf
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    References listed on IDEAS

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    1. Benhabib Jess & Perli Roberto, 1994. "Uniqueness and Indeterminacy: On the Dynamics of Endogenous Growth," Journal of Economic Theory, Elsevier, vol. 63(1), pages 113-142, June.
    2. Boucekkine Raouf & Ruiz Tamarit Ramon, 2004. "Imbalance Effects in the Lucas Model: an Analytical Exploration," The B.E. Journal of Macroeconomics, De Gruyter, vol. 4(1), pages 1-19, December.
    3. McDonald, Scott & Roberts, Jennifer, 2006. "AIDS and economic growth: A human capital approach," Journal of Development Economics, Elsevier, vol. 80(1), pages 228-250, June.
    4. Shankha Chakraborty & Mausumi Das, 2005. "Mortality, Human Capital and Persistent Inequality," Journal of Economic Growth, Springer, vol. 10(2), pages 159-192, June.
    5. Raouf Boucekkine & David de la Croix & Dominique Peeters, 2007. "Early Literacy Achievements, Population Density, and the Transition to Modern Growth," Journal of the European Economic Association, MIT Press, vol. 5(1), pages 183-226, March.
    6. 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.
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    8. Rosa Aísa & Fernando Pueyo, 2004. "Endogenous longevity, health and economic growth: a slow growth for a longer life?," Economics Bulletin, AccessEcon, vol. 9(3), pages 1-10.
    9. Boucekkine, R. & Ruiz-Tamarit, J.R., 2008. "Special functions for the study of economic dynamics: The case of the Lucas-Uzawa model," Journal of Mathematical Economics, Elsevier, vol. 44(1), pages 33-54, January.
    10. 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.
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    12. Alwyn Young, 2005. "The Gift of the Dying: The Tragedy of AIDS and the Welfare of Future African Generations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 423-466.
    13. Boucekkine, Raouf & de la Croix, David & Licandro, Omar, 2002. "Vintage Human Capital, Demographic Trends, and Endogenous Growth," Journal of Economic Theory, Elsevier, vol. 104(2), pages 340-375, June.
    14. de la Croix, David & Licandro, Omar, 1999. "Life expectancy and endogenous growth," Economics Letters, Elsevier, vol. 65(2), pages 255-263, November.
    15. Gustav Feichtinger & Vladimir Veliov & Tsvetomir Tsachev, 2004. "Maximum Principle For Age And Duration Structured Systems: A Tool For Optimal Prevention And Treatment Of Hiv," Mathematical Population Studies, Taylor & Francis Journals, vol. 11(1), pages 3-28.
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    18. Cuddington, John T, 1993. "Further Results on the Macroeconomic Effects of AIDS: The Dualistic, Labor-Surplus Economy," The World Bank Economic Review, World Bank, vol. 7(3), pages 403-417, September.
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    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Consequences

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    Cited by:

    1. Paul Cahu & Falilou Fall, 2011. "Accounting for the effects of AIDS on growth in Sub-Saharan Africa," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00609798, HAL.
    2. BOUCEKKINE, Raouf & LAFFARGUE, Jean-Pierre, 2007. "A theory of dynamics and inequalities under epidemics," LIDAM Discussion Papers CORE 2007037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Raouf Boucekkine & Bity Diene & Theophile Azomahou, 2008. "Growth Economics of Epidemics: A Review of the Theory," Mathematical Population Studies, Taylor & Francis Journals, vol. 15(1), pages 1-26.
    4. Rahmiye Figen Ceylan & Burhan Ozkan & Esra Mulazimogullari, 2020. "Historical evidence for economic effects of COVID-19," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(6), pages 817-823, August.
    5. Raouf Boucekkine & Raouf Boucekkine, 2006. "Medium term dynamics and inequalities under epidemics," Computing in Economics and Finance 2006 209, Society for Computational Economics.
    6. Eric Nævdal, 2012. "Fighting Transient Epidemics—Optimal Vaccination Schedules Before And After An Outbreak," Health Economics, John Wiley & Sons, Ltd., vol. 21(12), pages 1456-1476, December.
    7. Curran, Declan & Fröling, Maria, 2010. "Large-scale mortality shocks and the Great Irish Famine 1845-1852," Economic Modelling, Elsevier, vol. 27(5), pages 1302-1314, September.
    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.

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    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

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