The economic impact of AIDS in sub-Saharan Africa

Azomahou, Théophile;Boucekkine, Raouf;Diene, Bity
(2008) , 28 pages

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Authors
  • Azomahou, ThéophileMaastricht University
    Author
  • Boucekkine, RaoufUCLouvain
    Author
  • Diene, BityUniversité Louis Pasteur
    Author
Abstract
In this paper, a simple general equilibrium model a la Solow is developed to capture the impact of AIDS on economic growth. To this end, a benchmark model due to Cuddington and Hancock (1994) is extended in various directions. In particular, the sharply declining life expectancy patterns are clearly reflected in the enlarged model through a generic Ben-Porath mechanism. AIDS-related health expenditures are incorporated as well. Using up-do-date optimal forecasting methods, the model applied to South Africa shows that while a relatively short term assessment might not reveal any dramatic AIDS growth effect, the medium/long run impact can be truly devastating. In particular, the heavy trends in mortality and life expectancy currently induced by AIDS are shown to be potentially at least twice more detrimental for per capita economic growth in the period 2020-2030 compared to 2000-2010.
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Azomahou, T., Boucekkine, R., & Diene, B. (2008). The economic impact of AIDS in sub-Saharan Africa (UNU-MERIT Working Paper 2008-038). https://hdl.handle.net/2078.5/250152