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| Kevin x.d. Huang, Hui He and Sheng-ti Hung |
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| ''Real business cycle with endogenous health'' |
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| A macro-health model with endogenous survival probability dependent on health history builds in an RBC framework three channels of
endogenous health accumulation documented in several scientific
disciplines: (1) health affects utility; (2) health affects
productivity but depreciates with labor or production; and (3)
health is maintained with medical care or leisure activity. The
model generates pro-cyclical healthcare and mortality, in line with
data, and other aggregate properties seen in the RBC literature. We
find that (2) and (3) are key to explaining the cyclical behaviors
of health variables while broader features of data also favor a
model without (1). |
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| Keywords: Macro-health; Business cycle; Mortality; Health expenditure; Time allocation |
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
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| Manuscript Received : Apr 11 2016 | | Manuscript Accepted : Apr 13 2016 |
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