Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129309
Authors: 
Frankovic, Ivan
Kuhn, Michael
Wrzaczek, Stefan
Year of Publication: 
2016
Series/Report no.: 
ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 02/2016
Abstract: 
We study the role of health care within a continuous time economy of overlapping generations subject to endogenous mortality. The economy consists of two sectors: final goods production and a health care sector, selling medical services to individuals. Individuals demand health care with a view to lowering mortality over their life-cycle. We derive the age-specific individual demand for health care based on the value of life as well as the resulting aggregate demand for health care across the population. We then characterize the general equilibrium allocation of this economy, providing both an analytical and a numerical representation. We study the allocational impact of a medical innovation both in the presence and absence of anticipation; and a temporary baby boom. We place particular emphasis on disentangling general equilibrium from partial equilibrium impacts and identifying the relevant transmission channels.
Subjects: 
demographic change
life-cycle model
health care
health policy
medical change
overlapping generations
value of life
JEL: 
D91
I11
I12
I18
J11
J17
O31
O41
Document Type: 
Working Paper

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