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Health, growth and welfare: a theoritical appraisal of the long run impact of medical R&D

By Stefano Bosi and Thierry Laurent

Abstract

This paper aims at providing a simple economic framework to address the question of the optimal share of investments in medical R&D in total public spending. In order to capture the long-run impact of tax-financed medical R&D on the growth rate, we develop an endogenous growth model in the spirit of Barro [1990]. The model focuses on the optimal sharing of public resources between consumption and (non-health) investment, medical R&D and other health expenditures. It emphasizes the key role played by the public health-related R&D in enhancing economic growth and welfare in the long run.

Topics: H51 - Government Expenditures and Health, I18 - Government Policy; Regulation; Public Health, H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies, O31 - Innovation and Invention: Processes and Incentives
Year: 2011
DOI identifier: 10.1080/16081625.2011.9720886
OAI identifier: oai:mpra.ub.uni-muenchen.de:33789

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