Comparative Dynamics in Health Economics: Some Useful Results

Stockholm School of Economics Working Paper Series in Economics and Finance No. 17

Posted: 25 Aug 1998

See all articles by Per-Olov Johansson

Per-Olov Johansson

Stockholm School of Economics

Karl-Gustav Lofgren

University of Umea - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Stockholm School of Economics

Date Written: May 1994

Abstract

In analysis of atemporal models, comparative statics experiments are typically carried out, often employing envelope properties, such as Roy's identity, Hotelling's lemma and Shephard's lemma, in order to simplify the analysis. In analysis of dynamic models, such experiments are seldom undertaken because of the complexity involved. In this note, we illustrate how to employ dynamic envelope properties in order to arrive at surprisingly simple comparative dynamics results in optimal control theory models. We also extend the envelope theorem to an infinite horizon problem with fundamental time dependency, and apply the result to parametric changes in death risks and health production functions.

JEL Classification: I10, D61, D81, C61

Suggested Citation

Johansson, Per-Olov and Lofgren, Karl-Gustav, Comparative Dynamics in Health Economics: Some Useful Results (May 1994). Stockholm School of Economics Working Paper Series in Economics and Finance No. 17, Available at SSRN: https://ssrn.com/abstract=90277

Per-Olov Johansson (Contact Author)

Stockholm School of Economics ( email )

P.O. Box 6501
Stockholm
SWEDEN
+46 8 736 92 82 (Phone)
+46 8 30 21 15 (Fax)

Karl-Gustav Lofgren

University of Umea - Department of Economics ( email )

UmeƄ University
Umea, SE - 90187
Sweden

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Stockholm School of Economics

P.O. Box 6501
Stockholm
SWEDEN

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