Liquidity, Economic Activity, and Mortality
William Evans and
The Review of Economics and Statistics, 2012, vol. 94, issue 2, 400-418
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)
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