Paper Title
Health, Human Capital, Wealth, and Business Cycles
Abstract
This study is to identify existence of business fluctuations in a growth model with endogenous health, human capital
and wealth by Zhang (2018). Zhang synthesizes the main ideas four important models in economic theory within a comprehensive
framework. These traditional models are the Solow one-sector neoclassical growth mode, Arrow’s learning by doing model, the
Uzawa-Lucas two sector model, and Grossman’s health growth model. The model also applies Zhang’s idea about creative leisure
or learning by consuming, concept of disposable income and utility. Health service and education are determined in markets. The
model examines dynamic interactions between wealth accumulation, health change, human capital growth, economic structural
change, and time distribution between work, health caring, and education under perfect competition. This paper extends Zhang’s
model to allow time-independent parameters to be time-dependent. We simulate the model to identify existence of equilibrium
points, plot motion of the dynamic system, and depict oscillations due to different exogenous shocks.
Keywords - Business Cycle; Exogenous Shocks; Health, Human Capital, Wealth Accumulation