Health, Taxes, and Growth
AbstractThis paper studies capital accumulation and consumption in the traditional Ramsey model under an exogenous growth framework. The model has three important features: (1) treating health as a simple function of consumption, which enable the study of health and growth in an aggregate macroeconomic model; (2) the existence of multiple equilibria of capital stock, health, and consumption, which is more consistent with the real world situation-rich countries may end up with high capital, better health, and higher consumption than poor countries; (3) the fundamental proposition of a consumption tax instead of capital taxation from the traditional growth model does not hold anymore in our model. As long as consumption goods contribute to health formation, the issue of a consumption tax versus an income (or capital) tax should be re-examined.
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Bibliographic InfoPaper provided by China Economics and Management Academy, Central University of Finance and Economics in its series CEMA Working Papers with number 482.
Length: 22 pages
Date of creation: 2011
Date of revision:
Publication status: Published in Annals of Economics and Finance, May 2010, pages 73-94
Health; Capital accumulation; Taxation;
Other versions of this item:
- H0 - Public Economics - - General
- I1 - Health, Education, and Welfare - - Health
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-22 (All new papers)
- NEP-DGE-2011-08-22 (Dynamic General Equilibrium)
- NEP-HEA-2011-08-22 (Health Economics)
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