Comparative Dynamics in Health Economics: Some Useful Results

Per-Olov Johansson () and Karl-Gustav Löfgren
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Per-Olov Johansson: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden

No 17, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: In analysis of atemporal models, comparative statics experiments are typically carried out, often employing envelope properties, such as Roy's identity, Hotelling's lemma and Shephard's lemma, in order to simplify the analysis. In analysis of dynamic models, such experiments are seldom undertaken because of the complexity involved. In this note, we illustrate how to employ dynamic envelope properties in order to arrive at surprisingly simple comparative dynamics results in optimal control theory models. We also extend the envelope theorem to an infinite horizon problem with fundamental time dependency, and apply the result to parametric changes in death risks and health production functions.

Keywords: Dynamic envelope theorem; risk; health; comparative dynamics (search for similar items in EconPapers)
JEL-codes: C61 D61 D81 I10 (search for similar items in EconPapers)
Pages: 14 pages
Date: 1994-05
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0017

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