Growth and Welfare Effects of Health Care in Knowledge Based Economies

We study the effects of a labor-intensive health care sector within an R&D-driven growth model with overlapping generations. Health care increases longevity and labor participation/productivity. We examine under which conditions expanding health care enhances growth and welfare. Even if the provision of health care diverts labor from productive activities, it may still fuel R&D and economic growth if the additional wealth that comes with expanding longevity translates into a more capital/machine-intensive final goods production and, thereby, raises the return to developing new machines. We establish mild conditions under which an expansion of health care beyond the growth-maximizing level is Pareto-improving

Population structure and consumption growth: Evidence from National Transfer Accounts

We assess the impact of population structure on economic growth. Following recent research, we focus on the generational turnover as a key driver of consumption growth. We characterize the impact of the average birth and death rates on the generational turnover, depending on the age-profile of consumption and on the extent of annuity market imperfection. Using recent data from the National Transfer Accounts on consumption profiles for a number of countries, we assess in a comparative way the sign and magnitude of generational turnover and its impact on consumption growth. We find considerable cross-country variation and trace it back to differences in demographic rates and in the consumption structure

A DAI approach to modeling the transportation domain

A central problem in the study of autonomous cooperating systems is that of how to establish mechanisms for controlling the interactions between different parts (which are called agents) of the system. One way to integrate such mechanisms into a multi-agent system is to exploit the technique of cooperation or negotiation protocols. In a protocol we distinguish to essential layers: the communication layer specifying the possible flow of messages between different agents, and the decision layer, which controls the selection of a message (speech-act) that the agent sends in a specific situation. In this report we first give a short introduction of our agent model InteRRap which provides the basis for the modeling of the different scenarios considered in the AKA-Mod project at the DFKI. The techniques we will discuss in the following are located in the plan based component and in the cooperation component of this model. The domain of application is the MARS scenario (Modeling a Multi-Agent Scenario for Shipping Companies) which implements a group of shipping companies whose goal it is to deliver a set of dynamically given orders, satisfying a set of given time and/or cost constraints. The complexity of the orders may exceed the capacities of a single company. Therefore, cooperation between companies is required in order to achieve the goal in a satisfactory way. This domain is of considerable interest for studies with economical background as well as for research projects. We give a short summary of results from economical studies that are concerned with the real-world situation in Germany in the transportation domain. They show the need for the development of new techniques from the field of computer science to tackle the problems therein. Then, an overview on related research is presented. Two approaches are discussed in more detail: the first one being based on OR-techniques and a second one being based on the concept of partial intelligent agents attempting to integrate techniques from OR and DAI. Both approaches are concerned with the situation in a single company. However, our purpose to handle the case of distributed shipping companies requires additional mechanisms, e.g. to cope with the problems of task allocation and task decomposition in multi-agent systems. Mechanisms for distributed task decomposition and task allocation processes in multi-agent systems belong to the core of our studies. Therefore, we will first discuss techniques for these problems in a general setting and then describe their implementations in the MARS system. In this description, particular emphasis is placed on the cooperation within a shipping company. Here, one company agent has to allocate a set of orders its truck agents. The truck agents support the company agents by giving cost estimations based on their route planning facility. Thus, this procedure provides the basis for the decisions of the company agents and is discussed in very detail. Finally, we present results from a series of benchmark tests. The test sets have also been run with OR-implementations and thus, give us the opportunity to compare our implementation against these approaches

On the long-run growth effect of raising the retirement age

We show that the long-run economic growth effect of an increase in the retirement age is unambiguously positive in research and development based endogenous growth models. This contrasts recent findings based on models of learning-by-doing-spillovers, in which an increase in the retirement age reduces physical capital accumulation and thereby economic growth. Our results imply that models based on learning-by-doing-spillovers, which are often used as a short-cut formulation for research and development based growth models, do not necessarily lead to similar policy conclusions

Population structure and consumption growth: Evidence from National Transfer Accounts

We assess the impact of population structure on economic growth. Following recent research, we focus on the generational turnover as a key driver of consumption growth. We characterize the impact of the average birth and death rates on the generational turnover, depending on the age-profile of consumption and on the extent of annuity market imperfection. Using recent data from the National Transfer Accounts on consumption profiles for a number of countries, we assess in a comparative way the sign and magnitude of generational turnover and its impact on consumption growth. We find considerable cross-country variation and trace it back to differences in demographic rates and in the consumption structure

Growth and welfare effects of health care in knowledge based economies

We consider an endogenous growth model with Blanchard-Yaari-type overlapping generations that is built around four sectors: final and intermediate goods production, an R&D sector and a health care sector. Health care serves to lower mortality and morbidity, the latter being related to participation/productivity in the labor market. We show that, regardless of its finance, the impact of health care on economic growth crucially depends on whether or not it increases employment in the R&D sector. Even if an increasing health care sector reduces the (effective) labor available for production and R&D, it may still fuel R&D employment and economic growth if the increase in aggregate wealth that comes with expanding longevity raises the capital intensity in the final goods sector to an extent that labor shifts to alternative employment in R&D. While numerical assessment indicates that the health sectors of the Euro area economies are too large from a growth perspective, we can establish mild conditions under which an expansion of health care beyond the growth-maximizing level constitutes a Pareto-improvement

Growth and welfare effects of health care in knowledge based economies

We study the effects of a labor-intensive health care sector within an R&D-driven growth model with overlapping generations. Health care increases longevity and labor participation/productivity. We examine under which conditions expanding health care enhances growth and welfare. Even if the provision of health care diverts labor from productive activities, it may still fuel R&D and economic growth if the additional wealth that comes with expanding longevity translates into a more capital/machine- intensive fi nal goods production and, thereby, raises the return to developing new machines. We establish mild conditions under which an expansion of health care beyond the growth-maximizing level is Pareto-improving

Growth and welfare effects of health care in knowledge based economies

We study the effects of a labor-intensive health care sector within an R&D-driven growth model with overlapping generations. Health care increases longevity and labor participation/productivity. We examine under which conditions expanding health care enhances growth and welfare. Even if the provision of health care diverts labor from productive activities, it may still fuel R&D and economic growth if the additional wealth that comes with expanding longevity translates into a more capital/machine- intensive final goods production and, thereby, raises the return to developing new machines. We establish mild conditions under which an expansion of health care beyond the growth-maximizing level is Pareto-improving

Rising longevity, increasing the retirement age, and the consequences for knowledge-based long-run growth

We assess the long-run growth effects of rising longevity and increasing the retirement age when growth is driven by purposeful research and development. In contrast to economies in which growth depends on learning-by-doing spillovers, raising the retirement age fosters economic growth. How economic growth changes in response to rising life expectancy depends on the retirement response. Employing numerical analysis we find that the requirement for experiencing a growth stimulus from rising longevity is fulfilled for the United States, nearly met for the average OECD economy, but missed by the EU and by Japan