Endogenous lifetime and economic growth: the role of the tax rate
Brembilla, Laurent (2016), Endogenous lifetime and economic growth: the role of the tax rate, Economic Theory Bulletin, 4, 2, p. 247-263. 10.1007/s40505-015-0084-6
TypeArticle accepté pour publication ou publié
Journal nameEconomic Theory Bulletin
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Laboratoire d'Economie de Dauphine [LEDa]
Abstract (EN)This paper revisits the health-economic growth nexus from the seminal contribution of Chakraborty (J Econ Theory 116(1):119–137, 2004). In his two periods overlapping generations model with a lifetime depending on public health expenditures, I study the influence of the tax rate on the economy. This enables me to determine in which cases the health policy can spur economic growth. I present three results: (i) In the endogenous growth case, the health policy can eradicate some poverty traps. (ii) The growth-maximizing tax rate is 0 in low-income countries. (iii) The steady state income level is an inverted U-shaped function or a decreasing function of the tax rate.
Subjects / KeywordsEndogenous longevity; Economic growth; Health and economic development; Overlapping generations
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