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Public Capital, Health Persistence and Poverty Traps

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Abstract

Growth dynamics and health outcomes are studied in a three period overlapping generations model with public capital. Reproductive agents face a non-zero probability of death in both childhood and adulthood. In addition to working, adults allocate time to their own health and child rearing. Health status in adulthood depends on health in childhood. With partial persistence in health, pure stagnation may occur. With full persistence, a stagnating equilibrium with low growth and high fertility may result from poor access to public capital. With threshold effects in health status, multiple growth regimes may emerge. A reallocation of public spending toward health or infrastructure may shift the economy from a low-growth equilibrium to a high-growth, low-fertility steady state.

Suggested Citation

  • P R Agénor, 2009. "Public Capital, Health Persistence and Poverty Traps," Centre for Growth and Business Cycle Research Discussion Paper Series 115, Economics, The Univeristy of Manchester.
  • Handle: RePEc:man:cgbcrp:115
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    Cited by:

    1. Stephen M. Miller & Kyriakos C. Neanidis, 2012. "Demographic Transition and Economic Welfare: The Role of Humanitarian Aid," Working papers 2012-06, University of Connecticut, Department of Economics.
    2. Vasilakis, Chrysovalantis, 2017. "Fighting Poverty And Child Malnutrition: On The Design Of Foreign Aid Policies," Macroeconomic Dynamics, Cambridge University Press, pages 1935-1956.
    3. Agénor, Pierre-Richard & Canuto, Otaviano, 2012. "Measuring the Effect of Gender-Based Policies on Economic Growth," World Bank - Economic Premise, The World Bank, issue 85, pages 1-6, June.
    4. Agénor, Pierre-Richard, 2010. "A theory of infrastructure-led development," Journal of Economic Dynamics and Control, Elsevier, pages 932-950.
    5. Rangan Gupta & Cobus Vermeulen, 2010. "Private and Public Health Expenditures in an Endogenous Growth Model with Inflation Targeting," Annals of Economics and Finance, Society for AEF, vol. 11(1), pages 139-153, May.
    6. Agénor, Pierre-Richard & Canuto, Otaviano, 2015. "Middle-income growth traps," Research in Economics, Elsevier, vol. 69(4), pages 641-660.

    More about this item

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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