Modeling the Macroeconomic Impact of Hiv/Aids

24 Pages Posted: 6 Feb 2006

See all articles by Markus Haacker

Markus Haacker

International Monetary Fund (IMF) - Research Department

Date Written: November 2002

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.

Keywords: Economic Growth, Capital Mobility, Dual Economy, HIV/AIDS, Africa

JEL Classification: I10, O40, O41, O55

Suggested Citation

Haacker, Markus, Modeling the Macroeconomic Impact of Hiv/Aids (November 2002). IMF Working Paper No. 02/195, Available at SSRN: https://ssrn.com/abstract=880315

Markus Haacker (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-4089 (Phone)
202-589-4089 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
177
Abstract Views
1,184
rank
184,202
PlumX Metrics