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Endogenous lifetime, accidental bequests and economic growth

Fanti, Luciano and Gori, Luca and Tramontana, Fabio (2011): Endogenous lifetime, accidental bequests and economic growth.

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Abstract

his paper introduces unintentional bequests in a closed economy overlapping generations model à la Chakraborty (2004). We show that poverty traps due to scarce public investments in health can exist. However, and most important, the existence of unintentional bequests makes the health tax rate to play a prominent role in determining the stability conditions of the equilibrium in rich economies. Indeed, non-monotonic dynamics, Neimark-Sacker bifurcations and deterministic chaos can occur depending on the size of the public health system.

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