the diffusion of health technologies cultural and biological divergence abstract this paper proposes the hypothesis that genetic distance to the health frontier influences population health outcomes evidence from a world sample suggests that genetic distance interpreted as long term cultural and biological divergence is an important factor in understanding health inequalities across countries specifically the paper documents a remarkably robust negative link between genetic distance to the united states and population health as measured by life expectancy at birth and the adult survival rate even after accounting for an extensive set of possible confounders such as gdp per capita and various climatic factors consistent with the interpretation that genetic distance is related to population health indirectly through human barriers to the diffusion of modern health technologies the evidence indicates that the gene gradient emerges at the onset of the international epidemiological transition

the cost of pollution on longevity welfare and economic stability this paper presents an overlapping generations model where pollution private and public health expenditures are all determinants of longevity public expenditures financed through labour taxation provide both public health and abatement we study the role of these three components of longevity on welfare and economic stability at the steady state we show that an appropriate fiscal policy may enhance welfare however when pollution is heavily harmful for longevity the economy might experience aggregate instability or endogenous cycles nonetheless a fiscal policy which raises the share of public spending devoted to health may display stabilizing virtues and rule out cycles this allows us to recommend the design of the public policy that may comply with the dynamic and welfare objectives

public health spending old age productivity and economic growth chaotic cycles under perfect foresight abstract this paper analyses the dynamics of a double cobb douglas economy with overlapping generations and public health investments that affect the supply of efficient labour of the old aged it is shown that the positive steady state of the economy is unique moreover we provide necessary and sufficient conditions for the emergence of endogenous deterministic complex cycles when individuals are perfectly foresighted interestingly i the equilibrium dynamics shows rather complicated phenomena such as a multiplicity of bubblings depending on the size of the public health system and ii the higher the degree of thriftiness the likelier an economy is exposed to endogenous fluctuations because the need to save when young to support consumption when old is reduced

endogenous lifetime and economic growth abstract endogenous mortality is introduced in a two period overlapping generations model probability of surviving from the first period to the next depends upon health capital that is augmented through public investment high mortality societies do not grow fast since shorter lifespans discourage savings development traps are possible productivity differences across nations result in persistent differences in capital output ratios and relatively larger gaps in income and mortality high mortality also reduces returns on education where risks are undiversifiable when human capital drives economic growth countries differing in health capital do not converge to similar living standards threshold effects may also result

environmental quality public debt and economic development this article analyzes the consequences on capital accumulation and environmental quality of environmental policies financed by public debt a public sector of pollution abatement is financed by a tax or by public debt we show that if the initial capital stock is high enough the economy monotonically converges to a long run steady state on the contrary when the initial capital stock is low the economy is relegated to an environmental poverty trap we also explore the implications of public policies on the trap and on the long run stable steady state in particular we find that government should decrease debt and increase pollution abatement to promote capital accumulation and environmental quality at the stable long run steady state finally a welfare analysis shows that there exists a level of public debt that allows a long run steady state to be optimal

public and private expenditures on health in a growth model abstract this paper introduces endogenous longevity into an otherwise standard overlapping generations model with capital in the model a young agent may increase the length of her old age by incurring investments in health such private health investments are assumed to be more productive if accompanied by complementary tax financed public health programs the presence of the public input in private longevity is shown to expose the economy to aggregate endogenous fluctuations and even chaos and such volatility is impossible in its absence the model is capable of generating dramatic reversals in life expectancy as has been observed in many countries

the precious bane abstract are natural resources harmful to growth we address this question using a two sector endogenous growth model in which human capital is the engine of growth by increasing the rewards to unskilled labor natural resources make schooling more expensive as long as the intertemporal elasticity of consumption substitution is not too high this slows down human capital accumulation and growth the presence of production spillovers from human capital however implies that a planner could react to a resource boom by increasing human capital accumulation even though the decentralized solution yields the exact opposite the paper also shows that as the production complementarity between natural resources and unskilled labor declines the growth effects of natural resources become increasingly sensitive to whether or not there is free trade in goods the empirical evidence lends support to the main channel natural resources to human capital to growth that is suggested in the paper

the family as an incomplete annuities market families can self insure against uncertain dates of death through implicit or explicit agreements with respect to consumption and interfamily transfers interfamily transfers need have nothing to do with altruistic feelings they may simply reflect risk sharing behavior of completely selfish family members although family annuity markets are incomplete even small families can substitute by more than 70 percent for perfect market annuities given adverse selection and transaction costs family risk pooling may be preferred to public market annuities in the absence of public annuities these risk sharing arrangements provide powerful incentives for marriage and family formation

education and economic growth a meta regression analysis summary this paper surveys the literature which examines the effect of education on economic growth specifically we apply meta regression analysis to 57 studies with 989 estimates and show that there is substantial publication selection bias toward a positive impact of education on growth once we account for this the genuine growth effect of education is not homogeneous across studies but varies according to several factors specifically it is attributed to differences in education measurement and study characteristics mainly model specification as well as type of data used and the quality of research outlets where studies are published e g academic journals vs working papers

a theory of infrastructure led development abstract this paper proposes a theory of long run development based on public infrastructure as the engine of growth the government in addition to investing in infrastructure spends on health services which in turn raise labor productivity and lower the rate of time preference infrastructure affects the production of both commodities and health services as a result of network effects the degree of efficiency of infrastructure is nonlinearly related to the stock of public capital itself provided that governance is adequate enough to ensure a sufficient degree of efficiency of public investment an increase in the share of spending on infrastructure financed by a cut in unproductive expenditure or foreign grants may facilitate the shift from a low growth equilibrium characterized by low productivity and low savings to a high growth steady state

limited life expectancy human capital and health investments human capital theory predicts that life expectancy will impact human capital attainment we estimate this relationship using variation in life expectancy driven by huntington disease an inherited neurological disorder we compare investments for individuals who have ex ante identical risks of hd but differ in disease realization individuals with the hd mutation complete less education and job training the elasticity of demand for college attendance with respect to life expectancy is around 1 0 we relate this to cross country and over time differences in education we use smoking and cancer screening data to test the corollary that health capital responds to life expectancy

capital and labor saving technical change in an aging economy does population aging and the associated increase in the old age dependency ratio affect economic growth the answer is given in a novel analytical framework that allows for population aging to affect endogenous capital and labor saving technical change the short run analysis reveals that population aging induces more labor and less capital saving technical change as it increases the relative scarcity of labor with respect to capital due to external contemporaneous knowledge spill overs across innovating firms induced technical change has a first order effect on current aggregate income in the long run capitalsaving technical progress vanishes and the economy s growth rate reflects only labor saving technical change however the mere possibility of capital saving technical change is shown to imply that the economy s steady state growth rate becomes independent of its age structure neither a higher life expectancy nor a decline in fertility affects economic growth in the long run

environmental degradation longevity and the dynamics of economic development i construct a two period overlapping generations model in which longevity is positively affected by public spending on health services and negatively affected by pollution it is shown that the parameters which determine the extent of environmental degradation i e emission rate and pollution abatement may also represent additional factors affecting the dynamics of the economy the likelihood of multiple non trivial steady state equilibria and the emergence of poverty traps the distribution of public spending between public health care and pollution abatement that maximizes equilibrium income is also derived this distribution of spending minimizes the threshold which the economy needs to surpass in order to avoid a poverty trap while under certain circumstances it can maximize equilibrium welfare as well

public private mix of health expenditure a political economy and quantitative analysis this paper constructs a simple model to examine decisions on public and private health spending under majority voting in the model agents with heterogeneous incomes choose how much to consume and spend on health care and vote for public health expenditure the health status of an agent is determined by a ces composite of public and private health expenditure the existence and uniqueness of the voting equilibrium are established a quantitative exercise reveals the importance of the relative effectiveness of public and private health expenditure and their substitutability in determining the public private mix of health expenditure and in accounting for the observed differences across a sample of 22 advanced democratic countries

demographic change human capital accumulation and r d based growth employing an overlapping generations model of r d based growth with endogenous fertility and education decisions we examine how demographic changes induced by an increase in life expectancy influence the long run growth rate of the economy we demonstrate that life expectancy when relatively low high positively negatively affects economic growth this paper also compares the growth implications of child education subsidy policies i e policies for enhancing basic education and child rearing subsidy policies i e pro natal policies and demonstrate that while the child education subsidies consistently foster economic growth child rearing subsidies may negatively affect economic growth

geography health and the pace of demo economic development abstract this paper investigates the impact of subsistence consumption and extrinsic and intrinsic causes of child mortality on fertility and child expenditure it offers a theory for why mankind multiplies at higher rates at geographically unfavorable tropical locations placed into a macroeconomic framework this behavior creates an indirect channel through which geography shapes economic performance it is explained why it are countries of low absolute latitude where we observe exceedingly slow if not stalled economic development and demographic transition

demand changes and real exchange rate dynamics in a finite horizon model with sectoral adjustment costs author affiliation hung ju chen department of economics national taiwan university 21 hsu chow road taipei 100 taiwan e mail hjc ntu edu tw corresponding author chen min hsu department of economics national taiwan university 21 hsu chow road taipei 100 taiwan e mail chenmin ntu edu tw acknowledgment we would like to acknowledge the financial support provided by the program for globalization studies at the institute for advanced studies in humanities national taiwan university grant 95r0064 ah03 03 we wish to express our sincere appreciation for helpful comments and suggestions provided by two anonymous referees the editor of the journal joshua aizenman been lon chen ming chia li tsunao okumura and elias sanidas as well as participants at the 2007 annual conference of the asia pacific economic association and the 2007 conference of korea and the world economy we also thank ke shaw lian for his assistance any errors within the work are our responsibility 1 introductionalthough the traditional macroeconomic models tend to explain economic fluctuations by focusing solely on supply shocks given that equilibrium is determined by both demand and supply it would seem obvious that changes in demand may also have important effects in terms of their contribution to economic oscillations changes in demand can easily occur particularly for those small open economies for example small open economies can be easily disturbed by external shocks such as terms of trade shocks through international trade 1 another example is the reduction in the mortality rate as a result of higher health investment both public and private and better healthcare during the economic development 2 for export orientated growth economies in particular such as those of hong kong and taiwan changes in either the terms of trade or the mortality rate can significantly influence economic performance impacting the real exchange rate investment output savings and the current account the phenomenon that life expectancy is steadily lengthening for most developing countries has led to the emergence of a growing number of studies on the impact of population aging 3 since an increase in life expectancy will change the expectation of lifetime utility it will directly affect households inter temporal decisions with regard to consumption and savings however previous studies tend to analyze the impact of mortality decline in a closed economy or in a small open economy with exogenous and constant factor prices 4in order to study the impact of mortality rate changes on the economic performance in an open economy we use the overlapping generations model with uncertain lifetime developed by yaari 1965 and blanchard 1985 to examine household savings behavior within this model agents live with a finite lifetime such that different types of agents simultaneously live in the economy 5 furthermore we extend the blanchard type model to a three good open economy composed of exportable importable and non traded goods to allow us to consider the dynamics of the real exchange rate when demand changes capital production and accumulation are also incorporated into the framework to facilitate an examination of the investment behavior of firms we assume that the economy uses both capital and labor to produce exportable goods and non traded goods while importable goods are imported from abroad capital is produced by the non traded sector and installation costs are incurred when capital is transported to the exportable sector 6 as indicated by morshed and turnovsky 2004 the inclusion of the sectoral adjustment costs of capital can generate persistent deviations from the long run equilibrium by the real exchange rate in response to demand changes 7 because the real exchange rate is playing a dual role of a non traded goods price and a capital price we are able to study the impact of population aging and terms of trade shocks on international capital flows in a small open economy with endogenous factor prices

savings and nutrition at low incomes while many development theorists assume saving propensities vary among different groups there has been limited theoretical justification for this view this paper analyzes two complementary theories stressing the effect on saving of physiological consequences of poor nutrition at low incomes one influence is on the probability of survival another is on workers productivity either effect means that the average propensity to save can rise with income issues considered include annuities exogenous changes in survival and efficiency implications for the efficiency wage theory of unemployment and distinctions between wage and nonwage income implications of nutritional effects for econometric specification of saving functions are stressed

replication realism and robustness analyzing political regimes and international trade makers who formulate trade policy we show that dai fails to accurately replicate our model and hence erroneously claims that the new equilibria she deduces are consistent with it in addition we demonstrate that in altering one of our assumptions dai offers a model that is less realistic as well as inconsistent with the substantive literature on international bargaining finally we question the robustness of her approach due to these problems of replication realism and robustness we conclude that dai s model is of limited utility ur article established that pairs of democracies trade more freely than mixed country pairs composed of a democracy and an autocracy mansfield milner and rosendorff 2000 hereafter mmr xinyuan dai 2002 asserts that our conclusion depends on the preferences of the decision makers who formulate trade policy dai is incorrect her results differ from ours solely because she has changed a key assumption of the model given the stated assumptions of our model each player s behavior in equilibrium is optimal and is a best reply it is often useful to debate the merits of a model s assumptions and it is not surprising that altering the assumptions can affect a model s results dai however ignores one of our explicitly stated assumptions and fails to acknowledge that her results differ from ours as a consequence moreover she never touches upon the relative merits of her assumption but when choosing a modeling strategy it is important to be attentive to the assumptions one uses preferring those that are more realistic and result in more general conclusions dai s model suffers from serious problems in this regard particularly because of its unrealistic assumptions about international economic negotiations furthermore dai offers no evidence about the robustness of her claims in contrast to our model finally the empirical record lends greater support to our argument than dai s since we found strong evidence that democratic pairs have had more open trade relations than mixed pairs irrespective of policy makers preferences in the following sections we elaborate on these problems of replication realism and robustness first we show that dai fails to replicate our model faithfully and hence erroneously claims that the new equilibria she deduces are consistent with it second we show that altering our assumption as dai does yields a model that is less realistic and less consistent with the substantive literature on international bargaining third we question the robustness of her approach we conclude that her model is of limited utility not only does our model capture an important element of international economic negotiations missing in dai s approach but also it yields results that are robust and have empirical support

the child is father of the man implications for the demographic transition we propose a new theory of the demographic transition based on the evidence from natural sciences that physical development during childhood affects adult life expectancy positively this theory is embodied in a continuous time olg framework where fertility longevity and education all result from individual decisions we conclude that a sustained improvement in physical development is at the basis of the observed demographic transition in today s developed countries and may be an important factor in explaining the slow transition from the malthusian towards the modern era the dynamics of the proposed model reproduce the key features of the demographic transition including sustained improvements in child physical development permanent increase in life expectancy a hump shaped evolution of both population growth and fertility and late increases in secondary educational attainments

intergenerational trade longevity and economic growth we develop an overlapping generations model of endogenous growth in which human capital is the engine of growth and the generations are linked through material and emotional interdependencies within the family parents invest in their children to achieve both old age support care and emotional gratification and material support from children is determined through self enforcing implicit contracts we show that optimal intergenerational trade can then lead to maximization of growth opportunities our model produces a theory of the demographic transition linking longevity fertility and economic growth we also show that while population aging may raise the growth rate an increase in young age longevity is likely to produce a greater increase in the growth rate and a reduction in the fertility rate in a growth equilibrium these predictions and the model s implications concerning the behavior of private savings during the takeoff period appear consistent with empirical evidence

diseases infection dynamics and development abstract the relationship between health and development is a subject of ongoing debate this paper contributes to the debate by proposing a general equilibrium theory of infectious disease transmission prevention investment and rational behavior diseases cause premature death labor productivity loss and lower quality of life higher disease prevalence lowers the average saving investment propensity the model offers two insights first infectious disease can plausibly generate an unconventional growth trap where income alone cannot push an economy out of underdevelopment second even when countries converge to the same balanced growth path the disease ecology significantly impairs the pace of economic development

mortality decline human capital investment and economic growth abstract we examine the role of increased life expectancy in raising human capital investment during the process of economic growth we develop a continuous time overlapping generations model in which individuals make optimal schooling investment choices in the face of a constant probability of death we present analytic results followed by results from a calibrated version of the model using realistic estimates of the return to schooling mortality decline produces economically significant increases in schooling and consumption allowing schooling to vary endogenously produces a much larger response of consumption and capital to mortality decline than is observed when schooling is held fixed

healthcare investment and income inequality abstract this paper examines how the relative shares of public and private health expenditures impact income inequality we study a two period overlapping generation s growth model in which longevity is determined by both private and public health expenditure and human capital is the engine of growth increased investment in health reduces mortality raises return to education and affects income inequality in such a framework we show that the cross section earnings inequality is non decreasing in the private share of health expenditure we test this prediction empirically using a variable that proxies for the relative intensity of investments private versus public using vaccination data from the national sample survey organization for 76 regions in india in the year 1986 87 we link this with region specific expenditure inequality data for the period 1987 2012 our empirical findings though focused on a specific health investment vaccines suggest that an increase in the share of the privately provided health care results in higher inequality

health spending savings and fertility in a lifecycle dynastic model with longevity externalities we investigate health spending savings fertility and policy implications in a lifecycle dynastic model with longevity externalities in annuity returns we show that such externalities engender not only excessive health spending but also under saving and excessive fertility social security and health subsidization increase health spending and savings but reduce fertility from laissez faire levels a publicly funded universal health system under labour income taxation raises fertility taxing health spending or using social security and public health together can obtain socially optimal health spending savings longevity and fertility numerical results based on us observations suggest substantial variations among these cases especially in old age health spending

health nutrition and economic development the relationship between health and economic development is explored focusing on nutrition based health indicators the spotlight is placed on the inter related feedbacks between the influence of health on productivity on one hand and the influence of income on health status on the other disentangling causality in these relationships has preoccupied much of the literature we evaluate different empirical strategies that have been adopted and assess the results there is now a body of evidence based on careful empirical studies that demonstrates a causal relationship between health and labor productivity there is also evidence that at least among the very poor additional income is spent on improved nutrition there are two issues that have received little attention although we argue they are likely to be very important first measurement of health is discussed in detail evidence is presented on how taking into account differences in the extent of measurement error is critical for interpreting the impact of health on wages the same theme emerges in studies of the effect of income on health specifically calorie intake the key role of non linearities in these relationships is highlighted and we demonstrate that a good deal of the variation in estimates of income elasticities of demand for calories can be ascribed to the role of measurement and functional form authors

infectious disease and preventive behavior in an overlapping generations model abstract this paper incorporates prevalence of disease and agent s preventive behavior i e health investment into a small open overlapping generations model and investigates the dynamic behaviors of the competitive equilibrium allocation using the model it is shown that agents prevalence elastic behaviors which are supported from empirical studies can be obtained and that such agents behaviors cause the cyclicity of the spread of disease we also show that although the agents preventive behavior in a competitive equilibrium may be insufficient because of the existence of external effects a one shot medical aid from foreign countries does not necessarily improve the agents welfare in the pareto sense

health capital and cross country variation in income per capita in the mankiw romer weil model abstract this paper examines the effects of incorporating a proxy for health capital in mankiw romer and weil s empirical growth model results suggest a stronger and more robust relationship between income per capita and health capital than between income per capita and educational human capital

life expectancy and endogenous growth we consider an overlapping generations model with uncertain lifetime and endogenous growth individuals have to choose the length of time devoted to schooling before starting to work we show that it depends positively on life expectancy but that the positive effect of a longer life on growth could be offset by a decrease in the participation rate dynamics are characterized by a delay differential equation and human capital converges with oscillations to a balanced growth path

life expectancy and the environment we present an olg model in which life expectancy and environmental quality dynamics are jointly determined agents may invest in environmental care depending on how much they expect to live in turn environmental conditions affect life expectancy as a result our model produces a positive correlation between longevity and environmental quality both in the long run and along the transition path eventually multiple equilibria may also arise some countries might be caught in a low life expectancy low environmental quality trap this outcome is consistent with stylized facts relating life expectancy and environmental performance measures we also discuss the welfare and policy implications of the inter generational externalities generated by individual choices finally we show that our results are robust to the introduction of growth dynamics based on physical or human capital accumulation c 2009 elsevier b v all rights reserved