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Modeling the Macroeconomic Impact of HIV/AIDS

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  • Mr. 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

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

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    1. Ms. Silvia Sgherri & Mr. Maitland MacFarlan, 2001. "The Macroeconomic Impact of HIV/AIDS in Botswana," IMF Working Papers 2001/080, 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. Mr. Markus Haacker, 2002. "The Economic Consequences of HIV/AIDS in Southern Africa," IMF Working Papers 2002/038, International Monetary Fund.
    4. 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.
    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.
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    Cited by:

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    2. Nicolas Couderc & Bruno Ventelou, 2005. "AIDS, Economic Growth and the Epidemic Trap in Africa," Oxford Development Studies, Taylor & Francis Journals, vol. 33(3-4), pages 417-426.
    3. Thurlow, James & Wobst, Peter, 2004. "The road to pro-poor growth in Zambia: past lessons and future challenges," DSGD discussion papers 16, International Food Policy Research Institute (IFPRI).
    4. Ian M. Trotter & Lu'is A. C. Schmidt & Bruno C. M. Pinto & Andrezza L. Batista & J'essica Pellenz & Maritza Isidro & Aline Rodrigues & Attawan G. S. Suela & Loredany Rodrigues, 2020. "COVID-19 and Global Economic Growth: Policy Simulations with a Pandemic-Enabled Neoclassical Growth Model," Papers 2005.13722, arXiv.org, revised Jun 2020.
    5. Tsegaye T Gatiso & Isabel Ordaz-Németh & Trokon Grimes & Menladi Lormie & Clement Tweh & Hjalmar S Kühl & Jessica Junker, 2018. "The impact of the Ebola virus disease (EVD) epidemic on agricultural production and livelihoods in Liberia," PLOS Neglected Tropical Diseases, Public Library of Science, vol. 12(8), pages 1-17, August.
    6. Abdelhamid Moustabchir & Hicham Ouakil, 2023. "Vaccination, treatment and containment policy to reduce the effects of the COVID‐19 pandemic in Morocco," African Development Review, African Development Bank, vol. 35(4), pages 351-364, December.
    7. Garima Malik, 2006. "An Examination of the Relationship between Health and Economic Growth," Macroeconomics Working Papers 22173, East Asian Bureau of Economic Research.
    8. Sulkhan Tabaghua, 2022. "Fiscal Rules and Post-Pandemic (Covid19) Economic Recovery," Proceedings of Economics and Finance Conferences 13215677, International Institute of Social and Economic Sciences.
    9. 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.
    10. José Cuesta, 2008. "Does a Mature AIDS Epidemic Threaten Growth?," Research Department Publications 4567, Inter-American Development Bank, Research Department.
    11. 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.
    12. Mr. Brou E Aka & Mr. Bernardin Akitoby & Mr. Amor Tahari & Mr. Dhaneshwar Ghura, 2004. "Sources of Growth in Sub-Saharan Africa," IMF Working Papers 2004/176, International Monetary Fund.
    13. 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.
    14. José Cuesta, 2008. "Does a Mature AIDS Epidemic Threaten Growth?," Research Department Publications 4567, Inter-American Development Bank, Research Department.
    15. 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.
    16. Deborah Johnston, 2008. "Bias, Not Error: Assessments of the Economic Impact of HIV/AIDS Using Evidence from Micro Studies in Sub-Saharan Africa," Feminist Economics, Taylor & Francis Journals, vol. 14(4), pages 87-115.
    17. Mabugu, Ramos E. & Maisonnave, Helene & Henseler, Martin & Chitiga-Mabugu, Margaret & Makochekanwa, Albert, 2023. "Implications of COVID-19 and mitigation measures on gender and the Zimbabwean economy," Economic Modelling, Elsevier, vol. 121(C).
    18. Mohamed, Issam A.W., 2011. "Surveying HIV/AIDS Incidence in Sudan," MPRA Paper 31781, University Library of Munich, Germany.
    19. 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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