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Does a Mature AIDS Epidemic Threaten Growth?

  • José Cuesta

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 Research Department Publications 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. 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.
  2. Robert Brent, 2006. "Does female education prevent the spread of HIV-AIDS in Sub-Saharan Africa?," Applied Economics, Taylor & Francis Journals, vol. 38(5), pages 491-503.
  3. 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.
  4. 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.
  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.
  6. Markus Haacker & Gonzalo Salinas, 2006. "HIV/AIDS; The Impacton Poverty and Inequality," IMF Working Papers 06/126, International Monetary Fund.
  7. 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.
  8. Cuesta, Jose, 2006. "Political Space, Pro-Poor Growth and Poverty Reduction Strategy in Honduras," MPRA Paper 12354, University Library of Munich, Germany.
  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.
  10. Joan-Ramon Borrell, 2007. "Pricing and patents of HIV/AIDS drugs in developing countries," Applied Economics, Taylor & Francis Journals, vol. 39(4), pages 505-518.
  11. 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.
  12. Carol Jenkins & David A. Robalino, 2003. "HIV/AIDS in the Middle East and North Africa : The Costs of Inaction," World Bank Publications, The World Bank, number 15089.
  13. 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.
  14. Arjun Bedi & Noel Gaston, 1997. "Returns to endogenous education: the case of Honduras," Applied Economics, Taylor & Francis Journals, vol. 29(4), pages 519-528.
  15. Wobst, Peter & Arndt, Channing, 2004. "HIV/AIDS and Labor Force Upgrading in Tanzania," World Development, Elsevier, vol. 32(11), pages 1831-1847, November.
  16. Markus Haacker, 2002. "Modeling the Macroeconomic Impact of HIV/AIDS," IMF Working Papers 02/195, International Monetary Fund.
  17. Ainsworth, Martha & Over, Mead, 1994. "AIDS and African Development," World Bank Research Observer, World Bank Group, vol. 9(2), pages 203-40, July.
  18. 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.
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