Public health infrastructure and growth: Ways to improve the inferior equilibrium under multiple equilibria |
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Institution: | 1. ISTerre, Université de Grenoble 1, UMR CNRS 5275, F-38041 Grenoble, France;2. Instituto de Ciencias de la Tierra, Universidad Central de Venezuela, Apdo. 3805, Caracas 1010-A, Venezuela;3. Fundación Venezolana de Investigaciones Sismológicas, FUNVISIS, El Llanito, Caracas 1030, Venezuela;4. ISTerre, Université de Savoie, UMR CNRS 5275, F-73376 Le Bourget-du-Lac, France;1. Department of Economics, Shiraz University, Shiraz, Iran;2. Department of Economics, Shiraz University, Shiraz, Iran |
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Abstract: | This paper develops an endogenous growth model in which public health infrastructure, specified as a stock, plays an important role in economic growth. A notable feature of the model is that it employs a non-separable utility function for consumption, leisure, and the level of public health. In addition, increasing the level of health infrastructure contributes to the production of goods through labor augmentation. With these settings, our model is found to have a unique equilibrium or multiple equilibria, depending on the magnitude of the intertemporal elasticity of substitution. For the case of multiple equilibria, we numerically study the ways to avoid the low-growth state in developing countries. From this, we identify two feasible policy implications. The results indicate that public health infrastructure has a vital role in the development policies of low-income countries. Lastly, we show that there are two possibilities in regard to the local dynamics of the model. |
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Keywords: | Health infrastructure Leisure Multiple equilibria Low-growth state |
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