The effects of HIV/AIDS infections and mortality on saving and investment

Abstract

There are competing views of how HIV/AIDS affects saving, and to a lesser extent, investment. One argument is that saving is reduced because of the disease; the other is that saving is actually increased. We find that saving is negatively impacted by the disease in poorer countries but increased in relatively wealthy countries. These results, however, do not translate through to investment. In fact, the absolute value of the impact the disease has on investment is considerably reduced for countries in all income brackets. We hypothesize that because of the significant transfer of resources from firms headquartered in relatively wealthy nations to subsidiaries and communities in poorer countries much of the negative impact that saving would necessarily have on investment is negated