The Growth Economics of Epidemics

Boucekkine, Raouf;Diene, Bity;Azomahou, Théophile
(2006)

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Authors
  • Boucekkine, Raouf
    Author
  • Diene, Bity
    Author
  • Azomahou, Théophile
    Author
Abstract
This paper examines in an endogenous growth theory perspective the mechanisms through which epidemics affect long term growth. Investment in both physical and human capital are key transmission variables in this respect. The paper distinguishes between Spanish flu like epidemics and AIDS like epidemics. Two-sector growth models are shown to better re°ect the specific effects of epidemics. The effects of an AIDS like pandemic on savings and education effort are also modelled via life expectancy. The paper is closed by an extension of the celebrated Cuddington-Hancock model to account for the latter features. An application to the South African case is provided. The main finding points at a delayed effect of AIDS on economic growth due to a the recent sharp drop in life expectancy in this country.
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Boucekkine, R., Diene, B., & Azomahou, T. (2006). The Growth Economics of Epidemics (ECON Working Papers 2006/21). https://hdl.handle.net/2078.5/130208