Health, Taxes, and Growth
This 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.
|Date of creation:||2011|
|Date of revision:|
|Publication status:||Published in Annals of Economics and Finance, May 2010, pages 73-94|
|Contact details of provider:|| Web page: http://cema.cufe.edu.cn/|
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