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Does the AIDS Epidemic Really Threaten Economic Growth?

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  • David E. Bloom
  • Ajay S. Mahal

Abstract

This study examines the claim that the AIDS epidemic will slow the pace of economic growth. We do this by examining the association, across fifty-one developing and industrial countries for which we were able to assemble data, between changes in the prevalence of AIDS and the rate of growth of GDP per capita. Our analysis uses well- established empirical growth models to control for a variety of factors possibly correlated with AIDS prevalence that might also influence growth. We also account for possible simultaneity in the relationship between AIDS and economic growth. Our main finding is that the AIDS epidemic has had an insignificant effect on the growth rate of per capita income, with no evidence of reverse causality. We also find evidence that the insignificant effect of AIDS on income per capita is qualitatively similar to an insignificant effect on wages of the Black Death in England and France during the Middle Ages and an insignificant effect on output per capita of influenza in India during 1918-19.

Suggested Citation

  • David E. Bloom & Ajay S. Mahal, 1995. "Does the AIDS Epidemic Really Threaten Economic Growth?," NBER Working Papers 5148, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:5148
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    1. 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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    5. Avner Ahituv & V. Joseph Hotz & Tomas Philipson, "undated". "Will the AIDS Epidemic be Self-Limiting? Evidence on the Responsiveness of the Demand for Condoms to the Prevalence of AIDS," University of Chicago - Population Research Center 93-3, Chicago - Population Research Center.
    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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    10. 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.
    11. David E. Bloom & Richard B. Freeman, 1986. "Population Growth, Labor Supply, and Employment in Developing Countries," NBER Working Papers 1837, National Bureau of Economic Research, Inc.
    12. Helen Robbins, 1928. "A Comparison of the Effects of the Black Death on the Economic Organization of France and England," Journal of Political Economy, University of Chicago Press, vol. 36(4), pages 447-447.
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    14. Cuddington, John T, 1993. "Modeling the Macroeconomic Effects of AIDS, with an Application to Tanzania," The World Bank Economic Review, World Bank, vol. 7(2), pages 173-189, May.
    15. Robert Summers & Alan Heston, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–1988," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 327-368.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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