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Endogenous lifetime in an overlapping generations small open economy

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  • Luciano Fanti
  • Luca Gori

Abstract

Using a simple overlapping generations small open economy, we show that endogenous longevity - through public health expenditure - may reduce both the saving rate and per capita domestic income, while increasing the per capita foreign debt in a country. Moreover, despite funding public health capital is always beneficial for life expectancy, it may or may not represent a Pareto improvement with respect to the laissez-faire solution depending on whether the world interest rate is high or low enough, respectively.

Suggested Citation

  • Luciano Fanti & Luca Gori, 2009. "Endogenous lifetime in an overlapping generations small open economy," Discussion Papers 2009/92, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    • Handle: RePEc:pie:dsedps:2009/92
    Note: ISSN 2039-1854
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    1. On the optimality of longevity?
      by Economic Logician in Economic Logic on 2009-11-23 21:33:00

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    1. Luciano Fanti & Luca Gori, 2014. "Endogenous fertility, endogenous lifetime and economic growth: the role of child policies," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 529-564, April.
    2. Luciano Fanti & Luca Gori & Fabio Tramontana, 2014. "Endogenous lifetime, accidental bequests and economic growth," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 37(1), pages 81-98, April.
    3. Luciano Fanti & Luca Gori, 2012. "Public Expenditure on Health and Private Old-Age Insurance in an OLG Growth Model with Endogenous Fertility: Chaotic Dynamics Under Perfect Foresight," Computational Economics, Springer;Society for Computational Economics, vol. 40(4), pages 333-353, December.
    4. Lorenzo Corsini & Pier Mario Pacini & Luca Spataro, 2010. "Workers' Choice on Pension Schemes: an Assessment of the Italian TFR Reform Through Theory and Simulations," Discussion Papers 2010/96, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

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    More about this item

    Keywords

    Health; Life expectancy; OLG model; Small open economy.;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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