Growth and enduring epidemic diseases

Abstract

This paper studies the formation of human capital and its transmission across generations when premature adult mortality is a salient feature of the demographic landscape, either permanently or in the form of a long-period wave that follows the outbreak of an epidemic. We establish several threshold properties of the model, for such a shock can severely retard economic growth, even to the point of leading to an economic collapse. Premature adult mortality may exacerbate inequality under nuclear family arrangements. Pooling mortality risks with equal treatment of all children may fend off, or even induce, a collapse, depending on the initial conditions and the size and duration of the shock. Awareness campaigns may also trigger a collapse by introducing undesirable expectational feedbacks.

A contribution to the theory of economic development and the demographic transition: fertility reversal under the HIV epidemic

“…Moreover, Juhn et al (2013), based on DHS data from all over SSA, concluded that: "Together with the results from other papers that document substantial declines in human capital accumulation, the results here suggest that HIV/AIDS is likely to decrease rather than increase future per capita incomes in Africa" [Juhn et al (2013, p. 851)]. In Bell and Gersbach (2013) and Fink and Linnemayr (2013), the possibility of an economic collapse following the HIV-induced disruption of human capital was further emphasized. Based on a different argument, Ueyama and Yamauchi (2009) found that Malawian women reacted to the HIV risk by lowering the age at marriage.…”

“…This hypothesis might become relevant under successful HIV control allowing good health survival of full-blown AIDS individuals. Accounting for heterogeneous agents may allow also capturing the heterogeneity between HIV and AIDS individuals and the issue of HIV-related orphan-hood [Bell and Gersbach (2013)].…”

“…The general equilibrium macroeconomic investigation of these complex phenomena and, in general, the theoretical investigation of the macro-economic effects of communicable diseases-be they epidemic or endemic-on economic development, is still in its infancy. Most available studies [Corrigan et al (2005), Momota et al (2005) Boucekkine and Laffargue (2010), Ferreira et al (2011), Bell and Gersbach (2013), Aksan and Chakraborty (2014), Azomahou et al (2016)] have focused on epidemic diseases represented as short-term shocks on mortality. The only efforts explicitly modeling the transmission dynamics of infection in a macroeconomic set-up are those of Chakraborty et al (2010Chakraborty et al ( , 2016, who derived a useful equation for infection spread and included it in an overlapping generations (OLG) framework.…”

“…(2005) Boucekkine and Laffargue (2010), Ferreira et al . (2011), Bell and Gersbach (2013), Aksan and Chakraborty (2014), Azomahou et al . (2016)] have focused on epidemic diseases represented as short-term shocks on mortality.…”

Impact of COVID-19 pandemic on Ternopil region socio-economic development

“…A study by Brainerd and Siegler (2003), one of the few on the economic effects of the Spanish influenza, suggests that the 1918-19 pandemic in the US actually increased economic growth in the 1920s. 2 Similarly, using a theoretical economic model, Young (2004) argues that the AIDS epidemic in South Africa will increase net future per capita consumptionwhile Bell and Gersbach (2004) find strong negative effects. Still, studies of the past give us valuable information about the proper assumptions to make when "guesstimating" the macroeconomic impact of future pandemics.…”