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Abstract: Microeconomic studies cannot, by definition, identify general equilibrium economic effects of changes in health. Macroeconomic analysis is needed for this, and the paper reviews three strands in the empirical literature, based respectively on cross‐country regression analysis, computable general equilibrium (CGE) modelling, and a mixture of microeconomic estimation and macroeconomic simulation. The first two strands have important drawbacks. Cross‐country regression is beset with the problem of finding valid instruments. CGE models tend to contain a large number of imposed parameters, making it hard to judge the robustness of simulation results. Mixing micro‐estimation with aggregative macro‐simulation appears most promising as this methodology allows both drawbacks to be avoided, at least in part.
African Development Review – Wiley
Published: Dec 1, 2012
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