Klaus Prettner

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The individual Euler equation: The current value Hamiltonian is H = log(c) + γ log(β) + λ [(r + µ − δ)k + ˆ w − (1 + ψβ)c]. The first order conditions are 1 c = λ(1 + ψβ) (A.1) γ β = λψc (A.2) ˙ λ = (ρ + δ − r)λ. (A.3) From equation (A.2) the birth rate follows as β = γ (1 − γ)ψ. (A.4) Taking the time derivative of equation (A.1) and plugging it into(More)
We study the effects of labor intensive health care within a research and development (R&D) driven growth model with overlapping generations. Health care increases longevity, labor participation, and productivity, while it also diverts labor away from production and R&D. We examine under which conditions expanding health care enhances growth and welfare and(More)
This article introduces a social planner version of a model central to the New Economic Geography for explicitly answering whether the symmetric equilibrium outcome of the decentralized market economy is socially desirable. We find that savings incentives are too weak, resulting in an inefficiently low capital stock and therefore an inadequate number of(More)
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