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Inequality in Life and Death
Martin S. Eichenbaum, Sergio Rebelo, Mathias Trabandt
IMF Economic Review,
March
2022
Abstract
We argue that the COVID epidemic disproportionately affected the economic well-being and health of poor people. To disentangle the forces that generated this outcome, we construct a model that is consistent with the heterogeneous impact of the COVID recession on low- and high-income people. According to our model, two-thirds of the inequality in COVID deaths reflect preexisting inequality in comorbidity rates and access to quality health care. The remaining third stems from the fact that low-income people work in occupations where the risk of infection is high. Our model also implies that the rise in income inequality generated by the COVID epidemic reflects the nature of the goods that low-income people produce. Finally, we assess the health-income trade-offs associated with fiscal transfers to the poor and mandatory containment policies.
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Inequality in Life and Death
Martin S. Eichenbaum, Sergio Rebelo, Mathias Trabandt
Abstract
We argue that the Covid epidemic disproportionately affected the economic well-being and health of poor people. To disentangle the forces that generated this outcome, we construct a model that is consistent with the heterogeneous impact of the Covid recession on low- and high-income people. According to our model, two thirds of the inequality in Covid deaths reflect pre-existing inequality in comorbidity rates and access to quality health care. The remaining third, stems from the fact that low-income people work in occupations where the risk of infection is high. Our model also implies that the rise in income inequality generated by the Covid epidemic reflects the nature of the goods that low-income people produce. Finally, we assess the health-income trade-offs associated with fiscal transfers to the poor and mandatory containment policies.
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Kommentar: Wir brauchen eine neue Corona-Strategie
Reint E. Gropp
Wirtschaft im Wandel,
No. 1,
2021
Abstract
Die gegenwärtige Corona-Strategie der Bundesregierung, wenn man sie denn so nennen kann, konzentriert sich darauf, besonders gefährdete Personen durch Impfung zu schützen und die Ansteckung aller anderen durch den Lockdown zu vermeiden. Sie ignoriert, dass Menschen im täglichen Leben immer Risiken eingehen und dabei auch Risiken berücksichtigen, die durch das Verhalten anderer entstehen. Sie entscheiden selbst, wie stark sie sich gefährden, je nach ihrer persönlichen gesundheitlichen Situation und Risikoaffinität. Die Möglichkeit, Risiken einzugehen, ist ein inhärenter Teil einer freiheitlichen Gesellschaft: Die Gesellschaft vertraut prinzipiell dem Einzelnen, einigermaßen vernünftige Entscheidungen zu treffen – und die Konsequenzen zu tragen, wenn die Dinge schiefgehen. Der Staat setzt dabei die Rahmenbedingungen, aber niemals mit dem Ziel, das Risiko für den Einzelnen auf null zu drücken.
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Kommentar: Das Corona-Dilemma
Reint E. Gropp
Wirtschaft im Wandel,
No. 1,
2020
Abstract
Die Politik steht zurzeit vor einem scheinbar unlösbaren Dilemma. Einerseits sollen die Infektionszahlen niedrig gehalten werden: um die medizinische Infrastruktur nicht zu überfordern, und weil in Abwesenheit einer wirkungsvollen Behandlung Menschenleben gerettet werden sollen. Andererseits wäre aber die Ansteckung großer Teile der Bevölkerung (jünger als 60 Jahre und ohne Vorerkrankungen) vielleicht sogar erstrebenswert, weil die Symptome bei dieser Gruppe ohnehin kaum bis gar nicht wahrnehmbar sind und durch sie eine Herdenimmunität entstehen würde, die systematisch Infektionsketten unterbrechen könnte.
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Integrated Assessment of Epidemic and Economic Dynamics
Oliver Holtemöller
IWH Discussion Papers,
No. 4,
2020
Abstract
In this paper, a simple integrated model for the joint assessment of epidemic and economic dynamics is developed. The model can be used to discuss mitigation policies like shutdown and testing. Since epidemics cause output losses due to a reduced labor force, temporarily reducing economic activity in order to prevent future losses can be welfare enhancing. Mitigation policies help to keep the number of people requiring intensive medical care below the capacity of the health system. The optimal policy is a mixture of temporary partial shutdown and intensive testing and isolation of infectious persons for an extended period of time.
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Towards Deeper Financial Integration in Europe: What the Banking Union Can Contribute
Claudia M. Buch, T. Körner, Benjamin Weigert
IWH Discussion Papers,
No. 13,
2013
Abstract
The agreement to establish a Single Supervisory Mechanism in Europe is a major step towards a Banking Union, consisting of centralized powers for the supervision of banks, the restructuring and resolution of distressed banks, and a common deposit insurance system. In this paper, we argue that the Banking Union is a necessary complement to the common currency and the Internal Market for capital. However, due care needs to be taken that steps towards a Banking Union are taken in the right sequence and that liability and control remain at the same level throughout. The following elements are important. First, establishing a Single Supervisory Mechanism under the roof of the ECB and within the framework of the current EU treaties does not ensure a sufficient degree of independence of supervision and monetary policy. Second, a European institution for the restructuring and resolution of banks should be established and equipped with sufficient powers. Third, a fiscal backstop for bank restructuring is needed. The ESM can play a role but additional fiscal burden sharing agreements are needed. Direct recapitalization of banks through the ESM should not be possible until legacy assets on banks’ balance sheets have been cleaned up. Fourth, introducing European-wide deposit insurance in the current situation would entail the mutualisation of legacy assets, thus contributing to moral hazard.
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Vertical Grants and Local Public Efficiency
Ivo Bischoff, Peter Bönisch, Peter Haug, Annette Illy
Abstract
This paper analyses the impact of vertical grants on local public sector efficiency. First, we develop a theoretical model in which the bureaucrat sets the tax price while voters choose the quantity of public services. In this model, grants reduce efficiency if voters do not misinterpret the amount of vertical grants the local bureaucrats receive. If voters suffer from fiscal illusion, i.e. overestimate the amount of grants, our model yields an ambiguous effect of grants on efficiency. Second, we use the model to launch a note of caution concerning the inference that can be drawn from the existing cross-sectional studies in this field: Taking into account vertical financial equalization systems that reduce differences in fiscal capacity, empirical studies based on cross-sectional data may yield a positive relationship between grants and efficiency even when the underlying causal effect is negative. Third, we perform an empirical analysis for the German state of Saxony-Anhalt, which has implemented such a fiscal equalization system. We find a positive relationship between grants and efficiency. Our analysis shows that a careful reassessment of existing empirical evidence with regard to this issue seems necessary.
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Greater Efficiency through More Competition in the Health Care Sector?
Ingmar Kumpmann
WSI-Mitteilungen,
No. 4,
2012
Abstract
In gesundheitspolitischen Debatten wird vielfach mehr Wettbewerb zwischen Krankenversicherungen als Mittel zur Steigerung der Effizienz des Gesundheitswesens empfohlen. In diesem Beitrag werden die Folgen eines idealtypischen Wettbewerbs zwischen Krankenversicherungen für Kosten und Qualität der medizinischen Versorgung diskutiert. Es wird argumentiert, dass die Kosten im Wettbewerb keineswegs sinken, sondern steigen, weil konkurrierende Kostenträger die starke Position der Leistungserbringer am Markt schlechter ausgleichen können als der Staat oder ein Versicherungskartell. Der Wettbewerb kann ferner dazu führen, dass sich der Markt segmentiert: einerseits in Versicherungen, die bei niedrigen Beiträgen nur Zugang zu unbeliebten Ärzten bieten, und andererseits Versicherungen, die gegen höhere Beiträge die freie Arztwahl garantieren. Die mit stärkerem Versicherungswettbewerb verbundene Einschränkung der freien Arztwahl beeinträchtigt den Ärztewettbewerb um Patienten.
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Monopolistic Competition and Costs in the Health Care Sector
Ingmar Kumpmann
IWH Discussion Papers,
No. 17,
2009
Abstract
Competition among health insurers is widely considered to be a means of enhancing efficiency and containing costs in the health care system. In this paper, it is argued that this could be unsuccessful since health care providers hold a strong position on the market for health care services. Physicians exert a type of monopolistic power which can be described by Chamberlin’s model of monopolistic competition. If many health insurers compete with one another, they cannot counterbalance the strong bargaining position of the physicians. Thus, health care expenditure is higher, financing either extra profits for physicians or a higher number of them. In addition, health insurers do not have an incentive to contract selectively with health care providers as long as there are no price differences between physicians. A monopolistic health insurer is able to counterbalance the strong position of physicians and to achieve lower costs.
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