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Rising longevity has led to population aging in developed countries, causing increasing concerns about its economic impact. Specially, the trend of population aging increases health expenditure in developed countries, and 70% to 80% of health expenditure is funded by public sector. Therefore, this paper focuses on the health demand in an aging economy and examines how the aging of the population and Public Health Funding (PHF) affects agents' behavior. For this purpose, the authors construct a simple growth model and examine the effect of aging and PHF on saving and the growth rate.
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