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Public health spending, old-age productivity and economic growth: chaotic cycles under perfect foresight

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  • Fanti, Luciano
  • Gori, Luca

Abstract

This paper analyses the dynamics of a double Cobb-Douglas economy with overlapping generations and public health investments that affect the supply of efficient labour of the old-aged. It is shown that the positive steady state of the economy is unique. Moreover, we provide necessary and sufficient conditions for the emergence of endogenous deterministic complex cycles when individuals are perfect foresighted. Interestingly, the equilibrium dynamics shows rather complicated phenomena such as a multiplicity of period-bubbling.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 21335.

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Date of creation: 11 Mar 2010
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Handle: RePEc:pra:mprapa:21335

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Keywords: OLG model; Productivity; Perfect foresight; Public health expenditure;

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Cited by:
  1. Nathalie Mathieu-Bolh & Xavier Pautrel, 2014. "Environmental taxation, health and the life-cycle," Working Papers hal-00930936, HAL.
  2. Luca Gori & Mauro Sodini, 2011. "Nonlinear Dynamics in an OLG Growth Model with Young and Old Age Labour Supply: The Role of Public Health Expenditure," Computational Economics, Society for Computational Economics, vol. 38(3), pages 261-275, October.
  3. Dimitrios Varvarigos, 2013. "Endogenous Cycles and Human Capital," Discussion Papers in Economics 13/18, Department of Economics, University of Leicester.
  4. Potrafke, Niklas, 2010. "The growth of public health expenditures in OECD countries: Do government ideology and electoral motives matter?," Journal of Health Economics, Elsevier, vol. 29(6), pages 797-810, December.

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