Optimal debt, endogenous fertility, and human capital externalities in a model with altruistic bequests

and human capital externalities. Because of such externalities, education investment is too low and fertility is too high. While education subsidies are the conventional means to deal with these problems, we show that the optimal policy also comprises debt even when distortionary taxes are used. The reason is that debt tips the usual trade-off between children's quantity and quality in favor of the latter by increasing the bequest cost of children. The optimal debt-output ratio exceeds 10% for plausible parameterization. (C) 2002 Elsevier B.V. All rights reserved.

The use of cusum analysis in the early detection and management of hospital bed occupancy crises

Objective: To assess the value of cusum analysis in hospital bed management. Design: Comparative analysis of medical patient flows, bed occupancy, and emergency department admission rates and access block over 2 years. Setting: Internal Medicine Services and Emergency Department in a teaching hospital. Interventions: Improvements in bed use and changes in the level of available beds. Main outcome measures: Average length of stay; percentage occupancy of available beds; number of patients waiting more than 8 hours for admission (access block); number of medical patients occupying beds in non-medical wards; and number of elective surgical admissions. Results: Cusum analysis provided a simple means of revealing important trends in patient flows that were not obvious in conventional time-series data. This prompted improvements in bed use that resulted in a decrease of 9500 occupied bed-days over a year. Unfortunately and unexpectedly, after some initial improvement, the levels of access block, medical ward congestion and elective surgical admissions all then deteriorated significantly. This was probably caused by excessive bed closures in response to the initial improvement in bed use. Conclusion: Cusum analysis is a useful technique for the early detection of significant changes in patient flows and bed use, and in determining the appropriate number of beds required for a given rate of patient flow.

Second-best public debt with human capital externalities

This paper studies optinnal public debt in a dynastic model with human capital externalities that cause human capital investment (fertility) to be below (above) its socially optimal level. By reducing fertility and raising human capital investment, the optimal debt can exceed 10% of output for plausible parameterizations.