In a recent paper I argued that Baumol's (1967) model of "unbalanced growth" offers a ready explanation for the observed secular rise in health care expenditure (HCE) in rich countries (HARTWIG 2006). Baumol's model implies that HCE is driven by wage increases in excess of productivity growth. I...

A large body of both theoretical and empirical literature has affirmed a positive impact of human capital accumulation in the form of health on economic growth. Yet Baumol (1967) has presented a model in which imbalances in productivity growth between a "progressive" (manufacturing) sector and a...

The share of health care expenditure in GDP rises rapidly in virtually all OECD countries, causing increasing concern among politicians and the general public. Yet, economists have to date failed to reach an agreement on what the main determinants of this development are. This paper revisits...

The paper proposes a new test of endogenous vs. exogenous growth theories based on the Granger-causality methodology and applies it to a panel of 20 OECD countries. The test yields divergent evidence with respect to physical and human capital. For physical capital, the test results favor...

Against the backdrop of Baumol's model of "unbalanced growth", a recent strand of literature has presented models that manage to reconcile structural change with Kaldor's "stylized fact" of the relative constancy of per-capita GDP growth. Another strand of literature goes beyond this, arguing...

Hartwig (2008) has presented empirical evidence that the difference between real wage growth and productivity growth at the macroeconomic level is a robust explanatory variable for deflated health-care expenditure growth in OECD countries. In this paper, we test whether this finding is robust to...

Michael Grossman's human capital model of the demand for health has been argued to be one of the major achievements in theoretical health economics. Attempts to test this model empirically have been sparse, however, and with mixed results. These attempts so far relied on using - mostly...

We estimate a multivariate unobserved components-stochastic volatility model to explain the dynamics of a panel of six exchange rates against the US Dollar. The empirical model is based on the assumption that both countries' monetary policy strategies may be well described by Taylor rules with a...

We use real-time annual data on the fiscal balance, government current spending, current revenues and net capital outlays as published at a half yearly frequency in the OECD Economic Outlook for 25 OECD countries. For each fiscal year t we have a number of forecasts, a first release, and...

Measuring economic activity in real-time is a crucial issue in applied research and in the decision-making process of policy makers; however, it also poses intricate challenges to statistical filtering methods that are built to operate optimally under the auspices of an infinite number of...