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The dynamic relationship between health expenditure and economic growth: is the health-led growth hypothesis valid for Turkey?

Author

Listed:
  • Emre Atilgan

    (Trakya University)

  • Dilek Kilic

    (Hacettepe University)

  • Hasan Murat Ertugrul

    (Republic of Turkey Prime Ministry Undersecretariat of Treasury)

Abstract

The well-known health-led growth hypothesis claims a positive correlation between health expenditure and economic growth. The aim of this paper is to empirically investigate the health-led growth hypothesis for the Turkish economy. The bound test approach, autoregressive-distributed lag approach (ARDL) and Kalman filter modeling are employed for the 1975–2013 period to examine the co-integration relationship between economic growth and health expenditure. The ARDL model is employed in order to investigate the long-term and short-term static relationship between health expenditure and economic growth. The results show that a 1 % increase in per-capita health expenditure will lead to a 0.434 % increase in per-capita gross domestic product. These findings are also supported by the Kalman filter model’s results. Our findings show that the health-led growth hypothesis is supported for Turkey.

Suggested Citation

  • Emre Atilgan & Dilek Kilic & Hasan Murat Ertugrul, 2017. "The dynamic relationship between health expenditure and economic growth: is the health-led growth hypothesis valid for Turkey?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(5), pages 567-574, June.
    • Handle: RePEc:spr:eujhec:v:18:y:2017:i:5:d:10.1007_s10198-016-0810-5
    DOI: 10.1007/s10198-016-0810-5
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    More about this item

    Keywords

    Health-led growth hypothesis; Bound test; ARDL model; Kalman filter method; Turkey;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • I10 - Health, Education, and Welfare - - Health - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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