Gori, Luca and Sodini, Mauro (2011): Nonlinear dynamics in an OLG growth model with young and old age labour supply: the role of public health expenditure.
Download (190kB) | Preview
This paper analyses the dynamics of a two-dimensional overlapping generations model with young and old age labour supply. It is shown that the public provision of health investments, which, in turn, affects the demand for material consumption, may represent a source of local indeterminacy, nonlinear dynamics and multiplicity of equilibria. Furthermore, global indeterminacy may also occur because of the co-existence of two attractors with tangled basins of attraction.
|Item Type:||MPRA Paper|
|Original Title:||Nonlinear dynamics in an OLG growth model with young and old age labour supply: the role of public health expenditure|
|English Title:||Nonlinear dynamics in an OLG growth model with young and old age labour supply: the role of public health expenditure|
|Keywords:||Chaos; Labour supply; OLG model; Public health expenditure|
|Subjects:||C - Mathematical and Quantitative Methods > C6 - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling > C68 - Computable General Equilibrium Models
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models
I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy; Regulation; Public Health
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J22 - Time Allocation and Labor Supply
C - Mathematical and Quantitative Methods > C6 - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling > C62 - Existence and Stability Conditions of Equilibrium
|Depositing User:||Luca Gori|
|Date Deposited:||18. Jan 2011 20:19|
|Last Modified:||12. Feb 2013 15:24|
Antoci, A., & Sodini, M. (2009). Indeterminacy, bifurcations and chaos in an overlapping generations model with negative environmental externalities. Chaos, Solitons and Fractals, 42, 1439–1450.
Antoci, A., Galeotti, M., & Russu, P. (2010). Poverty trap and global indeterminacy in a growth model with open-access natural resources. Journal of Economic Theory, forthcoming, doi:10.1016/j.jet.2010.12.003.
Azariadis, C. (1993). Intertemporal Macroeconomics. Oxford: Blackwell.
Baltagi, B.H., & Moscone, F. (2010). Health care expenditure and income in the OECD reconsidered: evidence from panel data. Economic Modelling, 27, 804–811.
Bhattacharya, J., & Qiao, X. (2007). Public and private expenditures on health in a growth model. Journal of Economic Dynamics and Control, 31, 2519–2535.
Cazzavillan, G., Lloyd-Braga, T., & Pintus, P. (1998). Multiple steady states and endogenous fluctuations with increasing returns to scale in production. Journal of Economic Theory, 80, 60–107.
Cazzavillan, G. (2001). Indeterminacy and endogenous fluctuations with arbitrarily small externalities. Journal of Economic Theory, 101, 133–157.
Chakraborty, S. (2004). Endogenous lifetime and economic growth. Journal of Economic Theory, 116, 119–137.
de la Croix, D., & Michel, P. (2002). A Theory of Economic Growth. Dynamics and Policy in Overlapping Generations. Cambridge: Cambridge University Press.
de Vilder, R. (1996). Complicated endogenous business cycles under gross substitutability. Journal of Economic Theory, 71, 416–442.
Diamond, P.A. (1965). National debt in a neoclassical growth model. American Economic Review, 55, 1126–1150.
Domeij, D., & Johannesson, M. (2006). Consumption and health. Contributions to Macroeconomics, 6, 1–30, http://www.bepress.com/bejm/contributions/vol6/iss1/art6.
Duranton, G. (2001). Endogenous labour supply, growth and overlapping generations. Journal of Economic Behavior & Organization, 44, 295–314.
Evans, B.T., & Pritchard, C. (2000). Cancer survival rates and GDP expenditure on health: a comparison of England and Wales and the USA, Denmark, Netherlands, Finland, France, Germany, Italy, Spain and Switzerland in the 1990s. Public Health, 114, 336–339.
Fanti, L., & Gori, L. (2011). Public health spending, old-age productivity and economic growth: chaotic cycles under perfect foresight. Journal of Economic Behavior & Organization, forthcoming.
Farmer, R.E.A. (1986). Deficits and cycles. Journal of Economic Theory, 40, 77–86.
Gaumont, D., & Leonard, D. (2010). Human capital, externalities and growth in an overlapping generations model. Research in Economics, 64, 186–200.
Galor, O., & Weil, D.N. (1996). The gender gap, fertility, and growth. American Economic Review, 86, 374–387.
Gollin, D. (2002). Getting income shares right. Journal of Political Economy, 110, 458–474.
Gomes, O. (2006). Decentralized allocation of human capital and nonlinear growth. Computational Economics, 31, 45–75.
Grandmont, J.M. (1985). On endogenous competitive business cycles. Econometrica, 53, 995–1045.
Grandmont, J.M., Pintus, P., & de Vilder, R. (1998). Capital-labor substitution and competitive nonlinear endogenous business cycles. Journal of Economic Theory, 80, 14–59.
Hartwig, J. (2008). What drives health care expenditure?–Baumol’s model of ‘unbalanced growth’ revisited. Journal of Health Economics, 27, 603–623.
Kydland, F.E., & Prescott, E.C. (1982). Time to build and aggregate fluctuations. Econometrica, 50, 1345–1370.
Kraay, A., & Raddatz, C. (2007). Poverty traps, aid, and growth. Journal of Development Economics, 82, 315–347.
Ladrón-de-Guevara, A., Ortigueira, S., & Santos, M. S. (1999). A two-sector model of endogenous growth with leisure. Review of Economic Studies, 66, 609–631.
Leung, M.C.M., & Wang, Y. (2010). Endogenous health care, life expectancy and economic growth. Pacific Economic Review, 15, 11–31.
Long, J.B., & Plosser, C.I. (1983). Real business cycles. Journal of Political Economy, 91, 39–69.
Mira, C., Gardini, L., Barugola, A., & Cathala J.C. (1996). Chaotic Dynamic in Two-Dimensional Noninvertible Maps. Singapore: World Scientific.
Nourry, C. (2001). Stability of equilibria in the overlapping generations model with endogenous labor supply. Journal of Economics Dynamics and Control, 25, 1647–1663.
Nourry, C., & Venditti, A. (2006). Overlapping generations model with endogenous labor supply: general formulation. Journal of Optimization Theory and Applications, 128, 355–377.
Potrafke, N. (2010). The growth of public health expenditures in OECD countries: do government ideology and electoral motives matter? Journal of Health Economics, 29, 797–810.
Reichlin, P. (1986). Equilibrium cycles in an overlapping generations economy with production. Journal of Economic Theory, 40, 89–102.
Sloan, F.A., Viscusi, W.K., Chesson, H.W., Conover, C.J., & Whetten-Goldstein, K. (1998). Alternative approaches to valuing intangible health losses: the evidence for multiple sclerosis. Journal of Health Economics, 17, 475–497.
Viscusi, W.K., & Evans, W.N. (1990). Utility functions that depend on health status: estimates and economic implications. American Economic Review, 80, 353–374.
World Health Statistics (2010). Part II. Global Health Indicators. France.
Yokoo, M. (2000). Chaotic dynamics in a two-dimensional overlapping generations model. Journal of Economic Dynamics and Control, 24, 909–934.