The golden rule of longevity
Zoega, Gylfi and Gestsson, M. (2018) The golden rule of longevity. Macroeconomic Dynamics 23 (1), pp. 384-419. ISSN 1365-1005.
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Abstract
How much should society invest in medical care that extends the lives of the older generations? We derive a golden rule for the level of health care expenditures and find that the optimal level of life-extending health care expenditures should increase with rising productivity, increase with the retirement age, and also increase with the population growth rate if a higher growth rate lowers the ratio of retirees to working-age people sufficiently, while the effects of an improvement in medical technology are ambiguous. Moreover, we find that a market economy may be inefficient in terms of the provision of life-extending health care because an individual ignores the effect of his own longevity on the income of others.
Metadata
| Item Type: | Article |
|---|---|
| Keyword(s) / Subject(s): | Health care expenditures, golden rule, productivity |
| School: | Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School |
| Depositing User: | Gylfi Zoega |
| Date Deposited: | 11 Apr 2018 13:30 |
| Last Modified: | 02 Aug 2023 17:41 |
| URI: | https://eprints.bbk.ac.uk/id/eprint/21912 |
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