Bell, CliveKoukoumelis, Anastasios2012-03-192012-03-192009-04-01https://hdl.handle.net/10986/4110An AIDS epidemic threatens Ethiopia with a long wave of premature adult mortality, and thus with an enduring setback to capital formation and economic growth. The authors develop a two-sector model with three overlapping generations and intersectorally mobile labor, in which young adults allocate resources under rational expectations. They calibrate the model to the demographic and economic data, and perform simulations for the period ending in 2100 under alternative assumptions about mortality with and without the epidemic. Although the epidemic does not bring about a catastrophic economic collapse, which is hardly possible in view of Ethiopia's poverty and high background adult mortality, it does cause a permanent, downward displacement of the path of output per head, amounting to 10 percent in 2100. An externally funded program to combat the disease is socially very profitable.CC BY 3.0 IGOADULT ILLITERACYADVERSE IMPACTAGGREGATE COSTSAGRICULTURAL ACTIVITIESAGRICULTUREAIDS EPIDEMICAIDS PATIENTSALGORITHMAVERAGE GROWTHBASE YEARBENCHMARKBEQUESTSBRAIN DRAINBUDGETARY SUPPORTBULLETINCALCULATIONCALCULATIONSCAPITAL ACCUMULATIONCAPITAL FORMATIONCAPITAL MARKETSCAPITAL STOCKCHILD LABORCHILD LABOURCHILD MORTALITYCOMPLICATIONSCONDOMCONDOM PROMOTIONCONSTANT RETURNS TO SCALECONTRIBUTIONCONTRIBUTIONSCOSTS OF AIDSCURRENT INCOMEDEMOGRAPHIC TRANSITIONDEPENDENT CHILDRENDEPRECIATIONDEVELOPMENT ECONOMICSDEVELOPMENT STRATEGIESDIMINISHING RETURNSDISABILITYDISCOUNT RATEDUAL ECONOMYEARLY DEATHECONOMIC AGENTSECONOMIC COSTSECONOMIC GROWTHECONOMIC HISTORYECONOMIC PERFORMANCEECONOMIC REFORMEDUCATIONAL ATTAINMENTEDUCATIONAL ATTAINMENTSELASTICITYENDOGENOUS VARIABLESENDOWMENTSENROLLMENTENROLLMENTSENVIRONMENTAL ECONOMICSEXCESS MORTALITYEXCHANGE RATEEXOGENOUS VARIABLESEXPENDITUREEXPENDITURESEXTENDED FAMILYFACT SHEETFAMILIESFAMILY FARMFAMILY MEMBERSFAMILY STRUCTUREFARMERSFERTILITY LEVELSFERTILITY RATESFEWER CHILDRENFORECASTSFORM OF INVESTMENTFORMAL EDUCATIONGDPGDP PER CAPITAGENDERGENDER INEQUALITYGROWTH RATEHEALTH CAREHEALTH CARE COSTSHEALTH-SECTORHIVHOUSEHOLD POVERTYHOUSEHOLDSHUMAN CAPITALHUMAN DEVELOPMENTIMPACT OF AIDSINCOMEINFANTINFECTIONSINSURANCEINTERNAL MIGRATIONINTERNATIONAL BANKINTERNATIONAL COMMUNITYINVENTORYINVESTMENT IN EDUCATIONLABOR FORCELABOR FORCE PARTICIPATIONLABOR MARKETLABOR MARKETSLABOR SUPPLYLABOUR MARKETLEVEL OF EDUCATIONLEVEL OF FERTILITYLEVELS OF CONSUMPTIONLEVELS OF EDUCATIONLEVELS OF FERTILITYLEVELS OF MORTALITYLIFE EXPECTANCYLIFETIMELIVING CONDITIONSLIVING STANDARDSLOWER FERTILITYMARGINAL PRODUCTIVITYMARKET INFORMATIONMEDICAL CAREMIGRANTSMIGRATION FLOWSMINISTRY OF HEALTHMORTALITY RATENATIONAL DEVELOPMENTNATURAL RESOURCENUMBER OF CHILDRENNUMBER OF MIGRANTSOLD AGEOPPORTUNITY COSTSOPTIMIZATIONORPHANSPANDEMICPARENTAL CAREPER CAPITA INCOMESPHYSICAL CAPITALPOLICY RESEARCHPOLICY RESEARCH WORKING PAPERPOPULATION DIVISIONPOPULATION GROWTHPOPULATION MOVEMENTSPOPULATION PRESSUREPOPULATION RESEARCHPOPULATION SIZEPOPULATION STRUCTUREPOPULATION STRUCTURESPREMATURE ADULT MORTALITYPREMATURE DEATHPRESENT VALUEPRESENT VALUESPREVENTION INTERVENTIONSPRIMARY EDUCATIONPRIMARY SCHOOLPRIMARY SCHOOL AGEPROBABILITIESPROBABILITYPRODUCTIVITYPROFITABILITYPROGRESSPUBLIC GOODPUBLIC INVESTMENTPUBLIC POLICYRATE OF GROWTHRATE OF TRANSMISSIONRESPECTRURAL AREASRURAL POPULATIONSAFE BLOOD SUPPLYSAVINGSSAVINGS RATESCHOOL ATTENDANCESCHOOL-AGE CHILDRENSECONDARY EDUCATIONSEXSEX WORKERSSEXUALLY ACTIVESEXUALLY ACTIVE POPULATIONSMALLHOLDERSSOCIAL AFFAIRSSOCIAL SCIENCESOCIAL SCIENCE RESEARCHSOCIAL WELFARESOIL EROSIONSOURCES OF INCOMESTOCKSSURVIVAL RATETAX BURDENTOTAL FACTOR PRODUCTIVITYUNEMPLOYEDUNEMPLOYMENTUNIONUNIONSURBAN AREASURBAN DEVELOPMENTURBAN MIGRATIONURBAN POPULATIONURBANIZATIONUTILITY FUNCTIONVALUABLEVALUE ADDEDVICTIMSVILLAGEVILLAGESWAGEWAGESWORKING AGEWORLD POPULATIONYOUNG ADULTYOUNG ADULTHOODYOUNG ADULTSYOUNG CHILDRENYOUNG COUPLEWorld Bank10.1596/1813-9450-4919