Economic growth in development : health, demographics, and access to technologies

• Main Author: Haacker, Markus
• Published: London School of Economics and Political Science (University of London) 2008
• Subjects: 362.19697
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.645721

The first substantive chapter (II) addresses the macroeconomic impact of HIV/AIDS, with reference to sub-Saharan Africa. The framework is designed to capture some interactions between the formal and the informal sector, and - reflecting open capital markets of many economies affected by HIV/AIDS - to address the implications of capital mobility. Additionally, our study is the first academic study of the growth impact of scaling up antiretroviral treatment. Allowing for capital mobility, our analysis returns a stronger impact of HIV/AIDS on output and income per capita than the corresponding closed-economy models. The estimated impact on the informal sector is more pronounced than for the formal sector, reflecting a stronger impact of HIV/AIDS on savings rates. GDP per capita is lower in the scenario with comprehensive scaling-up of antiretroviral treatment, as rising costs of care and treatment affect savings rates. Chapter III adapts a microeconomic framework with forward-looking agents to study the contributions of health, as well as income, to living standards, drawing on empirical work on the value of statistical life. For leading industrialized countries, the contribution of health over long periods of time has been of similar magnitude as rising incomes, but the contribution of health has slowed down since about 1950. For developing countries, the slowdown occurred somewhat later. HIV/AIDS has resulted in steep declines in living standards in a number of countries in sub-Saharan Africa. Chapter IV focuses on the impact of capital-deepening arising from falling relative prices of ICT equipment. The estimated impact of ICT-related capital deepening on growth in developing countries is substantial (about 0.3 percentage points), although lower than comparable estimates for leading industrialized countries. Unlike in some industrialized countries, the impact of ICT-related capital deepening has not slowed down after 2000, owing to growing absorption of communications equipment.