HEALTH-LED ECONOMIC GROWTH IN SHORT AND LONG RUN: CASE OF EUROPEAN COUNTRIES
HEALTH-LED ECONOMIC GROWTH IN SHORT AND LONG RUN: CASE OF EUROPEAN COUNTRIES

Summary/Abstract: In recent decades, while public expenditure on healthcare has increased considerably, life expectancy growth has slowed down. Therefore, research on the relationship between healthcare financing and economic growth has become highly relevant in determining the efficiency of financial resource allocation. This study aims to explore three hypotheses on the subject. The first hypothesis is that increase in healthcare spending has a positive impact on economic growth in long run, the second - assess the same relationships in short run, and the third - assumes that scale and direction of the relationships in the chain "health expenditures → GDP per capita growth" varies due to country income. Hypotheses testing involves application of cluster analysis, Calinski-Harabasz pseudo-F stopping rule, pooled mean group estimator, and Hausman test based on data for 34 European countries for the period 2000-2023. The obtained results only partially confirmed the hypotheses.

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