Private and Public Health Expenditures in an Endogenous Growth Model with Inflation Targeting
AbstractThis paper develops a monetary endogenous growth overlapping generations model characterized by endogenous longevity and an inflation targeting monetary authority, and analyzes the growth dynamics that emerges from this framework. Besides the endogenous longevity which depends on the complimentarity of private and public health expenditures, the growth process is endogenized by allowing for a productive role of government expenditure on infrastructure. Following the huge existing literature, money is introduced by assuming that banks are obligated to hold a fraction of the deposits as cash reserve requirements. Given this framework, we show that multiple equilibria emerges, with the low-growth (high-growth) equilibrium being unstable (stable) and locally determinate (locally indeterminate). In addition, we show that, under certain conditions, endogenous fluctuations and even chaos could emerge around the high-growth equilibrium.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Society for AEF in its journal Annals of Economics and Finance.
Volume (Year): 11 (2010)
Issue (Month): 1 (May)
Indeterminacy; Inflation targeting; Longevity; Multiple equilibria; Overlapping generations; Public health;
Other versions of this item:
- Rangan Gupta & Cobus Vermeulen, 2010. "Private and Public Health Expenditures in an Endogenous Growth Model with Inflation Targeting," Working Papers 201001, University of Pretoria, Department of Economics.
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- J10 - Labor and Demographic Economics - - Demographic Economics - - - General
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Climent, Amparo Castello & Rafael Domenech, 2003.
"Human Capital Inequality, Life Expectancy and Economic Growth,"
Royal Economic Society Annual Conference 2003
46, Royal Economic Society.
- Amparo Castelló-Climent & Rafael Doménech, 2008. "Human Capital Inequality, Life Expectancy And Economic Growth," Economic Journal, Royal Economic Society, vol. 118(528), pages 653-677, 04.
- Amparo Castello-Climent & Rafael Domenech, 2006. "Human Capital Inequality, Life Expectancy and Economic Growth," Working Papers 0604, International Economics Institute, University of Valencia.
- Sarkar, Jayanta, 2007. "Growth dynamics in a model of endogenous time preference," International Review of Economics & Finance, Elsevier, vol. 16(4), pages 528-542.
- Bunzel, Helle & Qiao, Xue, 2004.
"Endogenous Lifetime and Economic Growth Revisited,"
Staff General Research Papers
12197, Iowa State University, Department of Economics.
- Robert J. Barro, 1988.
"Government Spending in a Simple Model of Endogenous Growth,"
NBER Working Papers
2588, National Bureau of Economic Research, Inc.
- Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S103-26, October.
- Barro, R.J., 1988. "Government Spending In A Simple Model Of Endogenous Growth," RCER Working Papers 130, University of Rochester - Center for Economic Research (RCER).
- Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
- Moshe Hazan & Hosny Zoabi, 2005.
"Does Longevity Cause Growth,"
GE, Growth, Math methods
- Kalemli-Ozcan, Sebnem, 2003.
"A stochastic model of mortality, fertility, and human capital investment,"
Journal of Development Economics,
Elsevier, vol. 70(1), pages 103-118, February.
- Sebnem Kalemli-Ozcan, 2002. "A Stochastic Model of Mortality, Fertility, and Human Capital Investment," Macroeconomics 0212009, EconWPA.
- Sebnem Kalemli-Ozcan, 2008. "The uncertain lifetime and the timing of human capital investment," Journal of Population Economics, Springer, vol. 21(3), pages 557-572, July.
- Rangan Gupta, 2005.
"Tax Evasion and Financial Repression,"
2005-34, University of Connecticut, Department of Economics, revised Jun 2007.
- Been-Lon Chen & Yeong-Yuh Chiang & Ping Wang, 2008. "Credit Market Imperfections and Long-Run Macroeconomic Consequences," Annals of Economics and Finance, Society for AEF, vol. 9(1), pages 151-175, May.
- Rangan Gupta & Emmanuel Ziramba, 2008.
"Costly Tax Enforcement and Financial Repression,"
200818, University of Pretoria, Department of Economics.
- Rangan Gupta & Emmanuel Ziramba, 2008. "Openness, Bureaucratic Corruption and Public Policy in an Endogenous Growth Model," Working Papers 200817, University of Pretoria, Department of Economics.
- Jocelyn E. Finlay, 2006. "Endogenous Longevity and Economic Growth," PGDA Working Papers 0706, Program on the Global Demography of Aging.
- Rangan Gupta, 2004.
"Costly State Monitoring and Reserve Requirements,"
2004-33, University of Connecticut, Department of Economics, revised Jul 2005.
- Aisa, Rosa & Pueyo, Fernando, 2006. "Government health spending and growth in a model of endogenous longevity," Economics Letters, Elsevier, vol. 90(2), pages 249-253, February.
- Blackburn, Keith & Cipriani, Giam Pietro, 2002. "A model of longevity, fertility and growth," Journal of Economic Dynamics and Control, Elsevier, vol. 26(2), pages 187-204, February.
- Rangan Gupta, 2008.
"Currency Substitution and Financial Repression,"
70, Economic Research Southern Africa.
- Jayanta Sarkar, 2008. "Mortality, Fertility, and Persistent Income Inequality," Southern Economic Journal, Southern Economic Association, vol. 75(2), pages 332-350, October.
- Pierre-Richard Agénor, 2006. "A Theory of Infrastructure-led Development," The School of Economics Discussion Paper Series 0640, Economics, The University of Manchester.
- Shankha Chakraborty, 2002.
"Endogenous Lifetime and Economic Growth,"
University of Oregon Economics Department Working Papers
2002-03, University of Oregon Economics Department, revised 26 Jan 2002.
- Rangan Gupta & Emmanuel Ziramba, 2008.
"Tax evasion and financial repression: A reconsideration using endogenous growth models,"
81, Economic Research Southern Africa.
- Rangan Gupta & Emmanuel Ziramba, 2009. "Tax evasion and financial repression: a reconsideration using endogenous growth models," Journal of Economic Studies, Emerald Group Publishing, vol. 36(6), pages 660-674, November.
- Rangan Gupta & Emmanuel Ziramba, 2008. "Tax Evasion and Financial Repression: A Reconsideration Using Endogenous Growth Models," Working Papers 200808, University of Pretoria, Department of Economics.
- Ken-ichi Hashimoto & Ken Tabata, 2005. "Health Infrastructure, Demographic Transition and Growth," Review of Development Economics, Wiley Blackwell, vol. 9(4), pages 549-562, November.
- Osang, Thomas & Sarkar, Jayanta, 2005. "Endogenous Mortality, Human Capital and Endogenous Growth," Departmental Working Papers 0511, Southern Methodist University, Department of Economics.
- Mitra, Tapan, 2001. "A Sufficient Condition for Topological Chaos with an Application to a Model of Endogenous Growth," Journal of Economic Theory, Elsevier, vol. 96(1-2), pages 133-152, January.
- repec:ebl:ecbull:v:15:y:2005:i:8:p:1-8 is not listed on IDEAS
- Noritaka Kudoh, 2004. "Debt, Deficits, and Deflation in an Economy with Central Bank Independence," Econometric Society 2004 Far Eastern Meetings 486, Econometric Society.
- Diamond, Peter & Yellin, Joel, 1990. "Inventories and Money Holdings in a Search Economy," Econometrica, Econometric Society, vol. 58(4), pages 929-50, July.
- Matteo Cervellati & Uwe Sunde, 2005. "Human Capital Formation, Life Expectancy, and the Process of Development," American Economic Review, American Economic Association, vol. 95(5), pages 1653-1672, December.
- Kam Ki Tang & Jie Zhang, 2007. "Health, Education, And Life Cycle Savings In The Development Process," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 615-630, 07.
- Bhattacharya, Joydeep & Qiao, Xue, 2005. "Public and Private Expenditures on Health in a Growth Model," Staff General Research Papers 12378, Iowa State University, Department of Economics.
- Wang, Chan, 2012. "A very preliminary survey on growth and development," MPRA Paper 39037, University Library of Munich, Germany.
- Shuyun May Li, Solmaz Moslehi, Siew Ling Yew, 2012.
"Public-Private Mix of Health Expenditure: A Political Economy Approach and A Quantitative Exercise,"
Department of Economics - Working Papers Series
1157, The University of Melbourne.
- Shuyun May Li & Solmaz Moslehi & Siew Ling Yew, 2012. "Public-Private Mix of Health Expenditure: A Political Economy Approach and A Quantitative Exercise," Development Research Unit Working Paper Series 11-12, Monash University, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Qiang Gao).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.