The Relationship between Health Expenditures and Economic Growth: Evidence from Turkey
Abstract
This study examines the relationship between health expenditures and economic growth in Turkey during the period 1975-2019 by using the Fourier Engle-Granger cointegration and the Fourier Toda-Yamamoto causality tests. Firstly, the Fourier ADF unit root test with fractional frequency is employed in order to investigate the stationary of the variables, and it is determined that both are I(1). Then, the Fourier Engle-Granger cointegration test revealed that there is a unidirectional long-run relationship from real GDP per capita to health expenditures. Accordingly, a one percent increase in economic growth causes a 0.32 percent increase in health expenditures. The findings from the Fourier Toda-Yamamoto causality test also support results of the Fourier Engle-Granger cointegration test. As a result, this study indicates that income view hypothesis and Wagner's law are valid for Turkey.
Keywords
Health Economics, Health Expenditures, Economic Growth, Wagner's law, Fourier Approach
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