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Macroeconomic Effects of Medicare / Juan Carlos Conesa, Daniela Costa, Parisa Kamali, Timothy J. Kehoe, Vegard M. Nygard, Gajendran Raveendranathan, Akshar Saxena.
- Format:
- Book
- Author/Creator:
- Conesa, Juan Carlos.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w23389.
- NBER working paper series no. w23389
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2017.
- Summary:
- This paper develops an overlapping generations model to study the macroeconomic effects of an unexpected elimination of Medicare. We find that a large share of the elderly respond by substituting Medicaid for Medicare. Consequently, the government saves only 46 cents for every dollar cut in Medicare spending. We argue that a comparison of steady states is insufficient to evaluate the welfare effects of the reform. In particular, we find lower ex-ante welfare gains from eliminating Medicare when we account for the costs of transition. Lastly, we find that a majority of the current population benefits from the reform but that aggregate welfare, measured as the dollar value of the sum of wealth equivalent variations, is higher with Medicare.
- Notes:
- Print version record
- May 2017.
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