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Modeling the Macroeconomic Impact of HIV/AIDS

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  • Markus Haacker

Abstract

The paper addresses the impact of HIV/AIDS on per capita output and income, with particular emphasis on the role of labor mobility between the formal and informal sectors, and the impact of the epidemic on investment decisions. The study finds that HIV/AIDS affects both the supply of labor and the demand for labor in the formal sector. Only if there is a significant rise in the capital-labor ratio, will there be an increase in formal sector employment. However, this is associated with a decline in the rate of return to capital. To the extent that companies respond to this by reducing investment, conventional models underestimate the adverse impact on employment, per capita output, and income. The analysis of the impact of HIV/AIDS on output is complemented by an assessment of the impact on income.

Suggested Citation

  • Markus Haacker, 2002. "Modeling the Macroeconomic Impact of HIV/AIDS," IMF Working Papers 02/195, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:02/195
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    References listed on IDEAS

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    1. Markus Haacker, 2002. "The Economic Consequences of HIV/AIDS in Southern Africa," IMF Working Papers 02/38, International Monetary Fund.
    2. 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.
    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. Silvia Sgherri & Maitland MacFarlan, 2001. "The Macroeconomic Impact of HIV/AIDS in Botswana," IMF Working Papers 01/80, International Monetary Fund.
    5. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Nicolas Couderc & Nicolas Drouhin & Bruno Ventelou, 2006. "SIDA et croissance économique : le risque d'une « trappe épidémiologique »," Revue d'économie politique, Dalloz, vol. 116(5), pages 697-715.
    2. José Cuesta, 2008. "Does a Mature AIDS Epidemic Threaten Growth?," Research Department Publications 4567, Inter-American Development Bank, Research Department.
    3. Jose Cuesta, 2010. "How much of a threat to economic growth is a mature AIDS epidemic?," Applied Economics, Taylor & Francis Journals, vol. 42(24), pages 3077-3089.
    4. Annim, Samuel Kobina & Dasmani, Isaac, 2010. "The joint effect of human capital and income inequalities on HIV/AIDS prevalence: An exploratory investigation," MPRA Paper 21251, University Library of Munich, Germany.
    5. José A. Cuesta, 2008. "Does a mature AIDS epidemic threaten growth?," IDB Publications (Working Papers) 1613, Inter-American Development Bank.
    6. 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.
    7. Wobst, Peter & Thurlow, James, 2005. "The Road to Pro-Poor Growth in Zambia: Past Lessons and Future Challenges," Proceedings of the German Development Economics Conference, Kiel 2005 37, Verein für Socialpolitik, Research Committee Development Economics.
    8. Brou E Aka & Bernardin Akitoby & Amor Tahari & Dhaneshwar Ghura, 2004. "Sources of Growth in Sub-Saharan Africa," IMF Working Papers 04/176, International Monetary Fund.
    9. Mohamed, Issam A.W., 2011. "Surveying HIV/AIDS Incidence in Sudan," MPRA Paper 31781, University Library of Munich, Germany.
    10. Garima Malik, 2006. "An Examination of the Relationship between Health and Economic Growth," Macroeconomics Working Papers 22173, East Asian Bureau of Economic Research.
    11. José Cuesta, 2008. "¿Una epidemia de SIDA en su etapa madura es una amenaza para el crecimiento?," Research Department Publications 4568, Inter-American Development Bank, Research Department.

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