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Investigation of the Co-Movement Relationship between Medical Expenditure and GDP in Taiwan-Based on Wavelet Analysis

Author

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  • Hsin-Pei Hsueh

    (School of Finance, Hubei University of Economics, Wuhan 430205, China)

  • Chien-Ming Wang

    (School of Economics and Trade, Hubei University of Economics, Wuhan 430205, China)

  • Cheng-Feng Wu

    (Research Center of Hubei Logistics Development, Hubei University of Economics, Wuhan 430205, China
    School of Business Administration, Hubei University of Economics, Wuhan 430205, China)

  • Fangjhy Li

    (School of Finance, Hubei University of Economics, Wuhan 430205, China)

Abstract

In this study, using the medical expenditures of the Taiwanese government and gross domestic product (GDP) as variables, the wavelet analysis method was used to empirically study the correlations and lead-lag relationships in quarterly data in the period from 1996 to 2016. In addition, the dependent population of the insured was used as the control variable. Results: After the dependent population was included as a control variable, there was a period of low- frequency (one to four years, short-term) linkage correlation, as well as a period of high- frequency (four to eight years, long-term) linkage correlation. In addition, for more than eight years, there was a high degree of linkage correlation, indicating that the linkage between medical expenditures and GDP occurred over the long- term. Moreover, since medical expenditures positively affected GDP, one-way causality was observed. However, after 2008, regardless of whether long or short- term was examined, there was almost no linkage correlation. Before 2008, the medical expenditures of the government were positively correlated with economic growth. After 2008, this effect had already disappeared. The universal health insurance system has long been denounced as a waste of medical resources. The government needs to find a new solution.

Suggested Citation

  • Hsin-Pei Hsueh & Chien-Ming Wang & Cheng-Feng Wu & Fangjhy Li, 2019. "Investigation of the Co-Movement Relationship between Medical Expenditure and GDP in Taiwan-Based on Wavelet Analysis," IJERPH, MDPI, vol. 16(24), pages 1-9, December.
    • Handle: RePEc:gam:jijerp:v:16:y:2019:i:24:p:5095-:d:297691
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    References listed on IDEAS

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