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The effects of HIV/AIDS infections and mortality on saving and investment

Author

Listed:
  • Edwards, Jeffrey A.
  • Al-Hmoud, Rashid
  • Fawaz, Fadi

Abstract

There are competing views of how HIV/AIDS affects saving, and to a lesser extent, investment. One argument is that saving is reduced because of the disease; the other is that saving is actually increased. We find that saving is negatively impacted by the disease in poorer countries but increased in relatively wealthy countries. These results, however, do not translate through to investment. In fact, the absolute value of the impact the disease has on investment is considerably reduced for countries in all income brackets. We hypothesize that because of the significant transfer of resources from firms headquartered in relatively wealthy nations to subsidiaries and communities in poorer countries much of the negative impact that saving would necessarily have on investment is negated.

Suggested Citation

  • Edwards, Jeffrey A. & Al-Hmoud, Rashid & Fawaz, Fadi, 2007. "The effects of HIV/AIDS infections and mortality on saving and investment," MPRA Paper 36308, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:36308
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    File URL: https://mpra.ub.uni-muenchen.de/36439/1/MPRA_paper_36439.pdf
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    References listed on IDEAS

    as
    1. Markus Haacker, 2002. "The Economic Consequences of HIV/AIDS in Southern Africa," IMF Working Papers 02/38, International Monetary Fund.
    2. Durlauf, Steven N. & Kourtellos, Andros & Minkin, Artur, 2001. "The local Solow growth model," European Economic Review, Elsevier, vol. 45(4-6), pages 928-940, May.
    3. Barry P. Bosworth & Susan M. Collins, 2003. "The Empirics of Growth: An Update," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(2), pages 113-206.
    4. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 70(1), pages 65-94.
    5. 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.
    6. S.A. Oni & C.L. Obi & A. Okorie & D. Thabede & A. Jordan, 2002. "The Economic Impact of HIV/AIDS on Rural Households in Limpopo Province," South African Journal of Economics, Economic Society of South Africa, vol. 70(7), pages 551-562, September.
    7. F. Booysen, 2002. "Financial Responses of Households in the Free State Province to HIV/AIDS-Related Morbidity and Mortality," South African Journal of Economics, Economic Society of South Africa, vol. 70(7), pages 563-574, September.
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    10. Cuddington, John T, 1993. "Modeling the Macroeconomic Effects of AIDS, with an Application to Tanzania," World Bank Economic Review, World Bank Group, vol. 7(2), pages 173-189, May.
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    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    HIV; AIDS; Saving; Investment; Africa; Developing Countries;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • I0 - Health, Education, and Welfare - - General

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