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Liquidity, Economic Activity, and Mortality

William Evans and Timothy Moore

The Review of Economics and Statistics, 2012, vol. 94, issue 2, 400-418

Abstract: We document a within-month mortality cycle where deaths decline before the first day of the month and spike after the first. This cycle is present across a wide variety of causes and demographic groups. A similar cycle exists for a range of economic activities, suggesting the mortality cycle may be due to short-term variation in levels of economic activity. We provide evidence that the within-month activity cycle is generated by liquidity. Our results suggest a causal pathway whereby liquidity problems reduce activity, which in turn reduces mortality. These relationships may help explain the procyclical nature of mortality. © 2012 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: mortality; liquidity constraints; income; consumption; life-cycle model; permanent-income hypothesis; tax rebates; pro-cyclical mortality (search for similar items in EconPapers)
JEL-codes: D14 D91 I10 I12 I38 (search for similar items in EconPapers)
Date: 2012
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The Review of Economics and Statistics is currently edited by Amitabh Chandra, Olivier Coibion, Bryan S. Graham, Shachar Kariv, Amit K. Khandelwal, Asim Ijaz Khwaja, Brigitte C. Madrian and Rohini Pande

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