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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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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: 27 Jul 2025 01:33
URI: https://eprints.bbk.ac.uk/id/eprint/21912

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