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Health, Growth and Welfare: A Theoretical Appraisal of the Long-Run Impact of Medical R&D

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  • Stefano Bosi
  • Thierry Laurent

Abstract

This paper aims at providing a simple economic framework to address the question of the optimal share of investments in medical R&D in total public spending. In order to capture the long-run impact of tax-financed medical R&D on the growth rate, we develop an endogenous growth model in the spirit of Barro (1990). The model focuses on the optimal sharing of public resources between consumption and (non-health) investment, medical R&D and other health expenditures. It emphasizes the key role played by the public health-related R&D in enhancing economic growth and welfare in the long run.

Suggested Citation

  • Stefano Bosi & Thierry Laurent, 2011. "Health, Growth and Welfare: A Theoretical Appraisal of the Long-Run Impact of Medical R&D," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 18(3), pages 307-332.
    • Handle: RePEc:taf:raaexx:v:18:y:2011:i:3:p:307-332
    DOI: 10.1080/16081625.2011.9720886
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    More about this item

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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