Abstract
A macro-health model with endogenous survival probability dependent on health history builds in a real business cycle (RBC) framework three channels of endogenous health accumulation documented in various scientific disciplines: (1) health affects utility; (2) health affects productivity but depreciates with production; and (3) health is maintained with medical care or leisure activity. The model generates pro-cyclical health care expenditure and counter-cyclical life expectancy, in line with the data, and other aggregate properties seen in the RBC literature. All three channels work to the right direction in matching the observables, and their interactions also play a role in helping improve the model's quantitative fit.
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