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Empirical evidence to the nonmonotonic relationship between public health expenditure and economic growth

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  • Swapnanil SENGUPTA

    (Eberhard Karls University of Tübingen, Germany)

Abstract

Government spending does not have a monotonic relationship with economic growth. The growth impacts of government spending differ owning to several factors. This paper has examined the relationship empirically. The empirical analysis has been carried out separately for developed and developing economies. The analysis has been performed with panel datasets of 36 developed and 88 developing countries over the period of 2000-2018. Fixed Effects (FE) model and Panel Error Correction Model (PECM) were used for estimation. The long-run cointegrating relationship was estimated using a PDOLS estimator. The FE estimation showed negative impacts of public expenditure on growth in developed economies whereas no causal relationship for the case of less developed economies. In the dynamic estimation analysis, it was found that public health expenditure negatively affected growth in developed economies and positively in the less developed economies, in the long run. In the short-run, no causal relationships could be established for both the cases.

Suggested Citation

  • Swapnanil SENGUPTA, 2022. "Empirical evidence to the nonmonotonic relationship between public health expenditure and economic growth," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(630), S), pages 49-62, Spring.
    • Handle: RePEc:agr:journl:v:1(630):y:2022:i:1(630):p:49-62
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    References listed on IDEAS

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    1. Churchill, Sefa Awawoyi & Yew, Siew Ling & Ugur, Mehmet, 2015. "Effects of government education and health expenditures on economic growth: a meta-analysis," Greenwich Papers in Political Economy 14072, University of Greenwich, Greenwich Political Economy Research Centre.
    2. Serge Mandiefe Piabuo & Julius Chupezi Tieguhong, 2017. "Health expenditure and economic growth - a review of the literature and an analysis between the economic community for central African states (CEMAC) and selected African countries," Health Economics Review, Springer, vol. 7(1), pages 1-13, December.
    3. M. Hashem Pesaran, 2015. "Testing Weak Cross-Sectional Dependence in Large Panels," Econometric Reviews, Taylor & Francis Journals, vol. 34(6-10), pages 1089-1117, December.
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    1. Manuela Ortega-Gil & Chaima ElHichou-Ahmed & Antonio Mata-García, 2022. "Effects of Immigrants, Health, and Ageing on Economic Growth in the European Union," IJERPH, MDPI, vol. 20(1), pages 1-17, December.
    2. Wei Jiang & Yadong Wang, 2023. "Asymmetric Effects of Human Health Capital on Economic Growth in China: An Empirical Investigation Based on the NARDL Model," Sustainability, MDPI, vol. 15(6), pages 1-16, March.

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