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    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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    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.


    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


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