Modeling the Macroeconomic Effects of Disease: Extension and Application in the context of Senegal

Pape Yona Boubacar Mane (), Abdoulaye Diagne () and Yao Kpegli
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Pape Yona Boubacar Mane: Université Gaston Berger, Saint-Louis
Abdoulaye Diagne: Consortium pour la recherche économique et sociale, Dakar

Economics Bulletin, 2019, vol. 39, issue 4, 2904-2912

Abstract: Despite the fact that the low- and middle-income countries that are most affected by the Non-communicable diseases have a net capital inflows-to-GDP ratio that represents a significant part of the investment rate, the existing models that quantify the economic burden of disease do not account for the fact that the diseases affect the nets capital inflows-to-GDP ratio. This paper proposes a framework for the analysis of the macroeconomic impact of non-communicable diseases, building upon a Solow-style model. It additionally accounts for i) the fact that the diseases affect the nets capital inflows-to-GDP ratio through the interest rate differential and ii) the education pertaining to the efficiency of labor alongside experience and morbidity. We have applied our methodology to the context of Senegal. The total losses associated with non-communicable diseases over the period 2015--2035 amount to US$ 23 billion. Without taking into consideration the influence of diseases on net capital inflows-to-GDP ratio, total losses will be underestimated by 2.63 %. Without taking account of education in the earning function, total losses will be overestimated by 2.54 %.

Keywords: Non-communicable Diseases; Aggregate output; Economic impact; Net capital inflows-to-GDP ratio; Human capital; Earning function; Senegal (search for similar items in EconPapers)
JEL-codes: I1 O4 (search for similar items in EconPapers)
Date: 2019-12-18
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