“The research project as a whole is focused on causal relationships running from health to productivity and poverty reduction with the aim of informing health policy. This framework paper deals with research possibilities in the field of macroeconomics, and it is necessary to begin by asking why such research may be useful.
The most important limitation of micro-economic studies is that they cannot, by definition, investigate general equilibrium effects of changes in health, or health policy. For example, the likely economic impact of AIDS on Sub Saharan Africa has been much studied. At the microeconomic level, it is possible to estimate effects on household labour supply and consequently on household incomes and their distribution, for given wage levels. However, there will also be general equilibrium effects on wages, which will depend in the medium term partly on the link from AIDS to capital formation.”
