How much of a threat to economic growth is a mature AIDS epidemic?

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Abstract:

The article models the impact on economic growth of HIV/AIDS when the epidemic is in a mature phase, in contrast with previous studies focused on periods of expansion as it is typically the case in African countries. Simulations for Honduras, the epicentre of the epidemic in Central America, show that AIDS is not likely to threaten economic growth neither through labour nor capital accumulation channels. Impacts are estimated between 0.007 and 0.27% points of Gross Domestic Product (GDP) growth annually for the period 2001 to 2010. Increasing spending on prevention, higher public treatment subsidies and increasing treatment access will not jeopardize economic growth prospects. Critical factors that slash economic growth in Africa (such as human capital reductions and shifts in relative skills) are not strong in Honduras.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840801964849

Affiliations: Inter-American Development Bank, NW, Washington, DC 20577, USA

Publication date: September 1, 2010

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