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Endogenous Life Expectancy in a Simple Model of Growth

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  • K Blackburn
  • H Issa

Abstract

In an overlapping generations economy reproductive agents mature safely through two periods of life and face an endogenous probability of surviving for a third period. Given this probability, which depends on aggregate outcomes, each agent maximises her expected lifetime utility by choosing consumption and savings. The dynamic general equilibrium of the economy is characterised by multiple development regimes associated with different levels of economic activity and different rates of life expectancy. Transition between these regimes may or may not occur depending on parameter values and initial conditions.

Suggested Citation

  • K Blackburn & H Issa, 2002. "Endogenous Life Expectancy in a Simple Model of Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 13, Economics, The University of Manchester.
    • Handle: RePEc:man:cgbcrp:13
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    File URL: http://hummedia.manchester.ac.uk/schools/soss/cgbcr/discussionpapers/dpcgbcr13.pdf
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    Cited by:

    1. Francesco Lancia & Giovanni Prarolo, 2012. "A politico-economic model of aging, technology adoption and growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(3), pages 989-1018, July.
    2. Fanti, Luciano & Gori, Luca, 2011. "Public health spending, old-age productivity and economic growth: Chaotic cycles under perfect foresight," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 137-151, April.
    3. Luciano Fanti & Luca Gori, 2014. "Endogenous fertility, endogenous lifetime and economic growth: the role of child policies," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 529-564, April.
    4. Weichun Chen & Merwan Engineer & Ian King, 2007. "Choosing Longevity with Overlapping Generations," Department of Economics - Working Papers Series 1002, The University of Melbourne.
    5. Cui, Xiaodong & Chang, Ching-Ter, 2020. "How life expectancy affects welfare in a Diamond-type overlapping generations model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 555(C).
    6. Fanti, Luciano & Gori, Luca, 2010. "Public expenditure on health and private old-age insurance in an OLG growth model with endogenous fertility: chaotic cycles under perfect foresight," MPRA Paper 23697, University Library of Munich, Germany.
    7. Fanti, Luciano & Gori, Luca, 2009. "A two-sector OLG economy: economic growth and demographic behaviour," MPRA Paper 18869, University Library of Munich, Germany.
    8. Fanti, Luciano & Gori, Luca, 2010. "Complex equilibrium dynamics in a simple OLG model of neoclassical growth with endogenous retirement age and public pensions," MPRA Paper 23694, University Library of Munich, Germany.
    9. Chen Weichun & Engineer Merwan H & King Ian P, 2008. "Choosing Longevity with Overlapping Generations: To Be or Not to Be in Diamond's Model," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 1-39, February.

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