Public Health Spending and Unfunded Public Pensions in an OLG Model of Neoclassical Growth: Some New Results About the Poverty Trap Problem
AbstractThis paper introduces unfunded pay-as-you-go public pensions in a two-period overlapping generations economy with endogenous lifetime a' la Chakraborty (2004). We study the transitional dynamics and steady states outcomes showing that the public provision of health services may have not only the well-known beneficial effect to help to escape from poverty, but it can also produce unexpected negative consequences for per capita GDP in both low-income-high-mortality and high-income-low-mortality economies. Moreover, under myopic expectations, the government health expenditure can generate nonmonotonic fluctuations in low mortality societies.
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Bibliographic InfoArticle provided by SIE - Societa' Italiana degli Economisti (I) in its journal Rivista Italiana degli Economisti.
Volume (Year): 16 (2011)
Issue (Month): 2 (July)
Find related papers by JEL classification:
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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