Author : Clive Bell
Publisher :
ISBN 13 :
Total Pages : 116 pages
Book Rating : 4.:/5 (129 download)
Book Synopsis The Long-Run Economic Costs of Aids by : Clive Bell
Download or read book The Long-Run Economic Costs of Aids written by Clive Bell and published by . This book was released on 2016 with total page 116 pages. Available in PDF, EPUB and Kindle. Book excerpt: Most existing estimates of the macroeconomic costs of AIDS, as measured by the reduction in the growth rate of gross domestic product, are modest. For Africa - the continent where the epidemic has hit the hardest - they range between 0.3 and 1.5 percent annually. The reason is that these estimates are based on an underlying assumption that the main effect of increased mortality is to relieve pressure on existing land and physical capital so that output per head is little affected. Bell, Devarajan, and Gersbach argue that this emphasis is misplaced and that, with a more plausible view of how the economy functions over the long run, the economic costs of AIDS are almost certain to be much higher. Not only does AIDS destroy existing human capital, but by killing mostly young adults, it also weakens the mechanism through which knowledge and abilities are transmitted from one generation to the next. The children of AIDS victims will be left without one or both parents to love, raise, and educate them.The model yields the following results. In the absence of AIDS, the counterfactual benchmark, there is modest growth, with universal and complete education attained within three generations. But if nothing is done to combat the epidemic, a complete economic collapse will occur within three generations. With optimal spending on combating the disease, and if there is pooling, growth is maintained, albeit at a somewhat slower rate than in the benchmark case in the absence of AIDS. If pooling breaks down and is replaced by nuclear families, growth will be slower still. Indeed, if school attendance subsidies are not possible, growth will be distinctly sluggish. In all three cases, the additional fiscal burden of intervention will be large, which reinforces the gravity of the findings.This paper - a product of the Office of the Vice President, Human Development Network - is part of a larger effort in the network to evaluate the economic consequences of HIV/AIDS.
