A brief contribution to the debate over the impact if HIV/AIDS on economic growth

The objective of this paper is to obtain estimates of the effect of HIV prevalence on the growth rate of real GDP per capita between 1990 and 2004 that are not affected by the presence of simultaneity. To achieve this goal requires an instrumental variable that is correlated with changes in the prevalence of HIV but is otherwise unrelated to with the error term of the growth equation. An instrument is a variable that does not itself belong in the regression, that is correlated with the suspect explanatory variable, and that is uncorrelated with the error term. The instrumental variables employed in this paper are a set of social and epidemiological determinants of the HIV infection, and indexes of macroeconomic performance at the country level.