Agricultural and Food Policy, Research Methods/Statistical Methods

IN RECENT YEARS a number of theoretical and statistical investigations' in the field of business-cycle analysis have made use of differeince equations, or mixed difference and differential equations. These equations serve to study the possible endogenous movements of a schematized economic system governed by a set of as many structural relations as there are variables, the movements of which are considered. In the investigations referred to, the treatment of such a set of equations has been to eliminate successively all variables but one, which leaves one from which the possible movements of the system under consideration are studied. If the final equation in the variable Zt is a linear homogeneous difference equation or mixed difference and differential equation, possible movements of Zt are found by substituting for it in the final equation an expression of the form2

We review the literature on financial intermediation in the process by which new medical therapeutics are financed, developed, and delivered. We discuss the contributing factors that lead to a key finding in the literature—underinvestment in biomedical R&D—and focus on the role that banks and other intermediaries can play in financing biomedical R&D and potentially closing this funding gap. We conclude with a discussion of the role of financial intermediation in the delivery of healthcare to patients.