Open access
Date
2010-09Type
- Working Paper
ETH Bibliography
yes
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Abstract
We develop a perpetual youth model to investigate how longevity affects economic growth and welfare. Life expectancy is determined by individuals’ investments in healthcare. We find that improvements in the healthcare technology always increase the steady state growth rate. Although the effect is small, even for large increases in longevity, welfare gains may be substantial depending on the type of the technological improvement. We identify two externalities associated with healthcare investments and provide a condition when healthcare expenditures are inefficiently low in the market equilibrium. Finally, we discuss our results with respect to alternative spillover specifications in the production sector. Show more
Permanent link
https://doi.org/10.3929/ethz-a-006170988Publication status
publishedJournal / series
Economics Working Paper SeriesVolume
Publisher
ETH Zurich, Center of Economic Research (CER-ETH)Subject
Economic growth; Endogenous longevity; Healthcare expenditures; Healthcare technology; Quality-quantity trade-offOrganisational unit
02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.03729 - Gersbach, Hans / Gersbach, Hans
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ETH Bibliography
yes
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