Longevity-induced vertical innovation and the tradeoff between life and growth

Baldanzi, Annarita; Prettner, Klaus; Tscheuschner, Paul

Longevity-induced vertical innovation and the tradeoff between life and growth

dc.contributor.author	Baldanzi, Annarita	de
dc.contributor.author	Prettner, Klaus	de
dc.contributor.author	Tscheuschner, Paul	de
dc.date.accessioned	2024-04-08T08:55:00Z
dc.date.available	2024-04-08T08:55:00Z
dc.date.created	2017-12-12
dc.date.issued	2017
dc.description.abstract	We analyze the economic growth effects of rising longevity in a framework of endogenous growth driven by quality-improving innovations. We show that a rise in longevity raises savings and thereby reduces the market interest rate. Since the monopoly profits generated by a successful innovation are discounted by the endogenous market interest rate, this raises the net present value of innovations, which, in turn, fosters R&D. The associated increase in the employment of scientists leads to faster technological progress and a higher long-run economic growth rate. From a welfare perspective, we show that the direct effect of an increase in life expectancy on lifetime utility is much larger than the indirect effect of the induced higher consumption due to faster economic growth. Consequently, the debate on rising health care expenditures should not predominantly be based on the growth effects of health care.	en
dc.identifier.swb	496257455
dc.identifier.uri	https://hohpublica.uni-hohenheim.de/handle/123456789/6204
dc.identifier.urn	urn:nbn:de:bsz:100-opus-14199
dc.language.iso	eng
dc.relation.ispartofseries	Hohenheim discussion papers in business, economics and social sciences; 2017,31
dc.rights.license	publ-mit-pod	en
dc.rights.license	publ-mit-pod	de
dc.rights.uri	http://opus.uni-hohenheim.de/doku/lic_mit_pod.php
dc.subject	Long-run growth	en
dc.subject	Vertical innovation	en
dc.subject	Increasing life expectancy	en
dc.subject	Welfare effects of changing longevity	en
dc.subject	Size of health-care sectors	en
dc.subject.ddc	330
dc.subject.gnd	Langlebigkeit	de
dc.subject.gnd	Wachstumstheorie	de
dc.title	Longevity-induced vertical innovation and the tradeoff between life and growth	de
dc.type.dcmi	Text	de
dc.type.dini	WorkingPaper	de
local.access	uneingeschränkter Zugriff	en
local.access	uneingeschränkter Zugriff	de
local.bibliographicCitation.publisherPlace	Universität Hohenheim	de
local.faculty.number	3	de
local.institute.number	520	de
local.opus.number	1419
local.series.issueNumber	2017,31
local.series.title	Hohenheim discussion papers in business, economics and social sciences
local.university	Universität Hohenheim	de
local.university.faculty	Faculty of Business, Economics and Social Sciences	en
local.university.faculty	Fakultät Wirtschafts- und Sozialwissenschaften	de
local.university.institute	Institute for Economics	en
local.university.institute	Institut für Volkswirtschaftslehre	de

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