Health Expenditures-Economic Growth Nexus: The EU 28 And Panel Feder-Ram Model

Year 2018, Volume: 13 Issue: 2, 184 - 193, 30.12.2018

Nilgün Serim Serdar Kurt

Abstract

This study uses the dynamic panel data Feder-Ram model to analyze possible direct
and indirect (external or productivity enhancer) effects of the health expenditures on
economic growth for 28 European Union Countries period of 2006-2015. The main
findings obtained from the study; The Feder-Ram equations show that the direct
effect of healthcare expenditures on economic growth is negative and statistically
significant. However, the indirect effect of healthcare expenditures on other sectors
are positive and significant. The healthcare expenditures increase the productivity of
labour factor and thus, the efficiency on other sectors and consequently, healthcare
expenditures provide a positive contribution to production. Results obtained from the
equations have shown that indirect effect is higher than direct effect. As a result, it can
be smoothly said that the net effect of healthcare expenditures is positive. 

Keywords

Direct and Indirect Effects, Health Expenditures, Economic Growth, The Feder–Ram Model

References

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