Endogenous Lifetime and Economic GrowthRevisited

Chakraborty [Journal of Economic Theory, 2004] introduces endogenousmortality in a two period overlapping generations model by postulating thatthe probability of surviving from the first period to the second depends on taxfundedpublic health. His central result on the existence of multiple steadystates (including development traps) summarized in Proposition 1 is incorrect.This paper presents the correct proposition and its proof, and in the process,uncovers several new, interesting results. Contrary to Chakraborty’s analysis,high mortality yet high capital nations may not be able to escape the povertytrap. Interestingly, TFP growth can help economies escape the vicious cycleof poverty.[...]