Health expenditures and economic growth evidence from G8 countries

Abstract

Health-growth literature generally includes studies on developing countries. Unlike previous health-growth literature, this paper investigates this issue in context of developed countries, G8 countries, within a panel framework. Annual data ranging from 1995 to 2012 are used for this investigation in the presence of capital stock. Kao (1999) panel cointegration results indicate the existence of a long-run equilibrium between the two. The findings from panel error correction model show the existence of growth hypothesis in the short-run whereas the validity of growth-detriment hypothesis is confirmed in the long-run. This studoy opens new directions for policy making authorities.