## Understanding Efficiency Technical efficiency: improving the speed at which lab results are produced Economic efficiency: investing in a new machine that can produce results in the same amount of time, but reduces the amount of overall labour required and therefore reduces overall costs [[Allocative efficiency]]: allocating budget across different health treatments or across healthcare and other sectors to maximise welfare in the population ## Market Failures Markets don't always function perfectly. Perfect market can reach equilibrium where demand = supply = marginal cost = marginal benefit. [[Question]] What are some common market failures, or reasons why a government may intervene in a market? Public goods (eg, clean air, herd immunity) Non-rival (person A enjoys the good without preventing person B) Non-excludable (no one is prevented from enjoying the good) Externalities (actions that have cost or benefit for others such as smoking, air pollution) ## Comparative advantage [[Question]] Does comparative advantage fully explain international trade patterns? What other factors are relevant? Definition: differences between countries in terms of their leverage and how they can specialize in trades, eg, technology, raw materials, etc. It does not fully explain the pattern because there are other factors, such as power distribution, global health history of colonialism, and what happened in the past that influenced today's global health dynamics. ## Macronoeconomics and Health [[Question]] Which one is the definition of [[Gross Domestic Product (GDP)]]? What are the other two? 1. Total value of goods and services produced in a country 2. Output of economic activities undertaken by the citizens and firms of a country, regardless of in which country the activity takes place 3. Adjusts prices to reflect the fact that relative prices of goods and services often differ greatly between countries 1. GDP 2. [[Gross National Income (GNI)]] 3. [[purchasing power parity (PPP)]] ## Exchange rate and the Balance of payments If the USD depreciates with respect to other currencies.. This will increase exports and decrease imports because it's cheaper for other countries to buy stuffs in USD when the USD depreciates. Import decrease because it's more expensive for people in the US to buy stuffs from other countries. ## Breakout Groups [[Question]] What are some ways that macroeconomic conditions can influence health? [[From a global health policy perspective, two specific areas of macroeconomics are of most relevance: economic prosperity and government revenues]]. This is partly due to the nature of macroeconomic that considers the economy across sectors rather than singular health-sector focused. If the government revenues decreases, then government budget to fulfill [[UHC]] packages weakens and they might have to choose their priorities due to their budget constraint. Economic prosperity will create more job creation, then churning happens where labour moves to other sectors. Without social safety nets and preventing the health catastrophe to impoverish the people during transition, this will influence health to the workers and their families. [[GHM101 Session 02 Macroeconomics and Health#4. Macroeconomics and the health sector]] Also if coupled with trade liberalisation, availability of health-harming products such as tobacco, high-calorie foods will influence overall health of the nation. [[Question]] What are some ways that health can influence macroeconomics? Better health means improved productivity and provided a ground for steady economic growth, reduced healthcare cost/burden for the government. Healthier population will stay in education longer. [[Question]] What is the relationship between GDP and health? Both ways. Health expenditure in health tend to increase when GDP increases. GDP is strongly correlated, but does not guarantee improve health. [[Higher expenditure does not equal better health]]. to Must ensure distribution of wealth instead of only thinking about the aggregate GDP improvement. Better housing, better education. But there is a possibility of plateu. Similar to previous comment, economic prosperity will create more job creation, then churning happens where labour moves to other sectors. Without social safety nets and preventing the health catastrophe to impoverish the people during transition, this will influence health to the workers and their families. [[Question]] What are the limitations of GDP as a measure of wellbeing? GDP is aggregate, it does not speak specifically on health in vulnerable population or other groups such as maternal and child health. It does not measure other influences on health, such as foreign aid, bilateral or multilateral cooperations. ## References https://eu-lti.bbcollab.com/collab/ui/session/playback