Endogenous lifetime in an overlapping generations small open economy

Luciano Fanti and Luca Gori ()

Discussion Papers from Dipartimento di Scienze Economiche (DSE), University of Pisa, Pisa, Italy

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.

Keywords: Health; Life expectancy; OLG model; Small open economy. (search for similar items in EconPapers)
JEL-codes: I18 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-hap and nep-hea
Date: 2009-10-15
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Persistent link: http://EconPapers.repec.org/RePEc:pie:dsedps:2009/92

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