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Endogenous lifetime, accidental bequests and economic growth

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  • Fanti, Luciano
  • Gori, Luca
  • Tramontana, Fabio

Abstract

his paper introduces unintentional bequests in a closed economy overlapping generations model à la Chakraborty (2004). We show that poverty traps due to scarce public investments in health can exist. However, and most important, the existence of unintentional bequests makes the health tax rate to play a prominent role in determining the stability conditions of the equilibrium in rich economies. Indeed, non-monotonic dynamics, Neimark-Sacker bifurcations and deterministic chaos can occur depending on the size of the public health system.

Suggested Citation

  • Fanti, Luciano & Gori, Luca & Tramontana, Fabio, 2011. "Endogenous lifetime, accidental bequests and economic growth," MPRA Paper 34647, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:34647
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    Keywords

    Accidental bequests; Endogenous lifetime; Health; OLG model;

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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