Inefficiency in the U.S. health care system has often been characterized as "flat of the curve" spending providing little or no incremental value. In this paper, we draw on macroeconomic models of diffusion and productivity to better explain the empirical patterns of outcome improvements in...

The efficient markets hypothesis has dominated modern research on asset prices. Asset prices and their intrinsic values differ in inefficient financial markets but difficulties in the measurement of intrinsic value greatly complicate market efficiency tests. Reflections on the measurement of...

Medicare expenditures per capita vary widely across different parts of the country. Average fee-for-service per capita expenditures in 1995/96 were $3,420 in Eugene, Oregon, $3,663 in Minneapolis, $7,847 in Miami, and $8,861 in McAllen, Texas. These measures are adjusted for differences across...

This paper argues that precautionary savings against uncertain income comprise a large fraction of aggregate savings. A closed-form approximation for life cycle consumption subject to uncertain interest rates and earnings is derived by taking a second-order Taylor-Series approximation of the...

Characterizes the enormous geographic disparity in Medicare spending across the U.S. (even after adjustment for demographics) as the fundamental problem in the program. Reviews alternative approaches that could more directly address the problem of geographic misallocation of health care issues.

Considers the impact of major tax reform (a cut in tax rates) on long-term growth rate. Examines the historical record of the U.S. economy, growth rates of other countries, and evidence from micro-level studies to conclude that tax rate cuts would have modest effects.

Medicare currently transfers roughly $200 billion annually to the elderly. The difference between medicare expenditures flowing into the state and annual Medicare taxes leaving the state--both on an annual and a lifetime basis--varies widely across states. Lifetime Medicare transfers, defined as...