scholarly journals Relationship between Health Expenditure and GDP in an Augmented Solow Growth Model for Pakistan: An Application of Co-integration and Error-Correction Modeling

2003 ◽  
Vol 8 (2) ◽  
pp. 1-16 ◽  
Author(s):  
Aurangzeb Aurangzeb
Keyword(s):  
Growth Model ◽  
Health Expenditure ◽  
Technological Changes ◽  
Solow Model ◽  
Health Capital ◽  
Specification Tests ◽  
Solow Growth Model ◽  
Short Run ◽  
Per Capita ◽  
Error Correction Modeling

This paper examines the temporal interdependence between gross domestic product and health expenditure per capita for Pakistan in an augmented Solow growth model suggested by Mankiw, Romer and Weil (1992) for the period of 1973-2001. This paper is an extension of the MRW model by incorporating health capital proxied by health expenditure to the augmented Solow model. Moreover, an openness variable is also included in the model in order to capture the effect of technological changes on growth. The paper employs co-integration, ECM methodology and several diagnostic and specification tests. The empirical findings show a significant and positive relationship between GDP and Health Expenditure, both in the long- and short-run.

Kaldor's Growth Theory

1992 ◽  
Vol 14 (1) ◽  
pp. 36-54 ◽  
Author(s):  
Nancy J. Wulwick
Keyword(s):  
Growth Model ◽  
Technical Progress ◽  
Growth Models ◽  
Increasing Returns ◽  
Growth Theory ◽  
Solow Model ◽  
Solow Growth Model ◽  
Policy Interventions ◽  
Long Run ◽  
Endogenous Technical Progress

The last decade has seen an outburst of growth models designed to replace the conventional Solow growth model, with its exogenous trend of technical progress, by more realistic models that generate increasing returns (to labor, capital and/or scale) as a result of endogenous technical progress. In contrast to the Solow model, the new models suggest that policy interventions can affect the long-run rate of economic growth. Nicholas Kaldor's growth model, designed in the late 1950s and early 1960s to replace the Solow growth model, is a precursor of the new growth models.

Testing the Validity of the Solow Growth Model: Empirical Evidence from Cross-Country Panel Data

2018 ◽  
Vol 3 (1) ◽  
pp. 18-22
Author(s):  
Chigozie Nelson Nkalu ◽  
Richardson Kojo Edeme ◽  
Queen O. Chukwuma
Keyword(s):  
Panel Data ◽  
Growth Model ◽  
Capital Stock ◽  
Important Variable ◽  
Solow Model ◽  
Related Literature ◽  
Solow Growth Model ◽  
Real Gdp ◽  
Output Side ◽  
Cross Country

This study seeks to test for the validity of the Solow growth model using cross-country panel data. Panel OLS analysis was adopted following an extensive review of recent and related literature with output-side of the real GDP as the dependent variable with other variables like population, capital stock and employment as the independent. However, population and capital stock are positively impacting the output with statistically significant value, while employment is not an important variable in the model even though it exhibits a negative and statistically significant effect to the output. In conclusion, the estimation result conforms the postulations of the basic Solow and augmented Solow growth model thereby validating the Solow model across-countries.

scholarly journals Is Pollution a Cost to Health? Theoretical and Empirical Inquiry for the World’s Leading Polluting Economies

2021 ◽  
Vol 18 (12) ◽  
pp. 6624
Author(s):  
Ramesh Chandra Das ◽  
Enrico Ivaldi
Keyword(s):  
Endogenous Growth ◽  
Health Expenditure ◽  
Developing Economies ◽  
Health Expenditures ◽  
Developed Countries ◽  
Theoretical Point ◽  
Capita Health Expenditure ◽  
Long Run ◽  
Short Run ◽  
Per Capita

Making development sustainable in the long run is the goal of policy makers of countries all over the world. To attain such a goal, countries have to face the dynamics of pollution-income interactions in both the short and long run, which are observed along the well-known Environmental Kuznets Curve (EKC). In the short run stage of the EKC, rising income and rising health expenditure may lead to rising pollution, while in the long run, as pollution continues, health expenditures increase, besides conservation of capital investment. The former is a common phenomenon in developing economies and the latter in the developed economies. Hence, there are both theoretical and empirical questions on whether health expenditures are caused by environmental pollution or not. The present study has attempted to investigate the issue from the theoretical point of view, through the endogenous growth framework, and by considering empirical observations for the world’s top 20 polluting countries for the period 1991–2019. The results show that per capita health expenditure and per capita pollution are cointegrated in the majority of the countries. However, in the short run, pollution is the cause of health expenditures for many developed countries in the list, and health expenditures are the cause of pollution in some of the developing countries. The results justify the claim of the endogenous growth model incorporating pollution and health expenditure.

scholarly journals Causality between Gross Domestic Product and Health Care Expenditure in the Augmented Solow’s Growth Model

2018 ◽  
Vol 2 (2) ◽  
pp. 19-30 ◽  
Author(s):  
Almas Heshmati
Keyword(s):  
Health Care ◽  
Gross Domestic Product ◽  
Health Care Expenditure ◽  
Domestic Product ◽  
Speed Of Convergence ◽  
Solow Model ◽  
Health Capital ◽  
Conditional Convergence ◽  
Close Link ◽  
Per Capita

This paper examines conditional convergence of OECD countries in gross domestic product (GDP) and health care expenditure (HCE) per capita. It extends the augmented Solow model by incorporating health capital to explain variations in output and expenditure per capita across countries. The issue of causality between GDP and HCE is investigated. The results show that HCE has positive effect on the economic growth and the speed of convergence. In the HCE model a regression of the speed of convergence on variables determining the rate of convergence show close link to the variables characterising the health care system of sample countries.

Electricity consumption and income nexus: evidence from Bangladesh

2019 ◽  
Vol 13 (4) ◽  
pp. 1020-1037 ◽  
Author(s):  
Sima Rani Dey
Keyword(s):  
Causal Relationship ◽  
National Income ◽  
Electricity Consumption ◽  
Content Type ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
Per Capita ◽  
Error Correction Modeling

Purpose The purpose of this study is to examine the causal relationship between per capita electricity consumption (PCEC) and per capita gross national income (GNI) (PCGNI) in Bangladesh for the period of 1971-2014. Design/methodology/approach Vector error correction modeling approach. Findings The study reveals that positive short-run unidirectional causal flow running between PCEC to PCGNI without feedback which implies that an increase in electricity consumption promptly affects economic activity. The results of both long-run and joint causality yield strong evidence of bidirectional causal relationship between PCEC and per capita real GNI with feedback. Originality/value Therefore, both electricity generation and conservation policy will be effective for Bangladesh economy. So, smooth supply of electricity is necessary to meet the growing electricity demand for consumption; consequently, it will lead to sustain of growth and take it even higher level.

Institutions-augmented solow model and income clubs

2011 ◽  
Vol 17 (2) ◽  
pp. 5
Author(s):  
Edinaldo Tebaldi ◽  
Ramesh Mohan
Keyword(s):  
Growth Model ◽  
Poverty Traps ◽  
Income Convergence ◽  
Factor Productivity ◽  
Solow Model ◽  
Poor Countries ◽  
Solow Growth Model ◽  
Income Gap ◽  
Quality Of Institutions

Growth economists still face major challenges and limitations to incorporate institutions into the standard growth framework. This article develops a simple institutions-augmented Solow growth model --that can be used in the classroom and for policy discussions --that accounts for the interactions between institutions and factor-productivity and examine the impacts of the quality of institutions on levels and growth rates of output. The institutions-augmented growth model shows that differences in the quality of institutions preclude income convergence and determine both the level and the growth rate of output per worker. The model also shows that poor institutions induce poverty traps. Furthermore, the income gap between rich and poor countries will not disappear if poor countries’ institutions do not improve relative to their rich counterpart.  

scholarly journals Impact of health capital on economic growth in Singapore: an ARDL approach to cointegration

2018 ◽  
Vol 45 (2) ◽  
pp. 340-356 ◽  
Author(s):  
Idowu Opeoluwa Isreal Akingba ◽  
Shivee Ranjanee Kaliappan ◽  
Hanny Zurina Hamzah
Keyword(s):  
Economic Growth ◽  
Health Expenditure ◽  
Series Data ◽  
Correction Coefficient ◽  
Health Capital ◽  
Substantial Impact ◽  
Content Type ◽  
Per Capita ◽  
The Impact

Purpose The purpose of this paper is to analyze the long-term impacts of health capital on economic growth in Singapore from 1980 to 2013. Design/methodology/approach Autoregressive distributed lag (ARDL)-ECM methodology and several diagnostic and specification tests were used to estimate the impact of health capital on economic growth on time series data covering the period 1980-2013. Findings The results confirm that health capital (measure by health expenditure per capita) positively and significantly affects Singapore’s economic growth in the long run. In addition, the equilibrium error correction coefficient lagged by one in the short-run is approximately 83.25 percent for all estimated variables, implying a considerably high speed of long-term adjustment to equilibrium following a short-term shock. Moreover, the Toda-Yamamoto’s Granger causality estimation reveals that there is a unidirectional causality from health expenditure per capita to GDP per capita. Research limitations/implications The findings imply that Singapore’s economic growth could be improved significantly if expenditure on health capital is increased. This eventually would have a substantial impact on human productivity which leads to improved output per capita. Thus, policy makers and/or the government should strive to create institutional capacity to improve basic health service by strengthening the health institutions infrastructure that produces healthy and quality manpower. Originality/value Grounded on the premises that there are little or no studies on the impact of health capital on Singapore economy, this paper provides new evidence on the potential effect of health capital on Singapore’s economic growth over the last three decades. Also, this study explore the causal effect (unidirectional or bidirectional) between health capital and economic growth.

scholarly journals An Empirical Analysis on the Relationship between Health Care Expenditures and Economic Growth in the European Union Countries

2018 ◽  
Vol 2 (1) ◽  
pp. 12
Author(s):  
Çiğdem Börke Tunalı ◽  
Naci Tolga Saruç
Keyword(s):  
Economic Growth ◽  
European Union ◽  
Health Expenditure ◽  
Gdp Per Capita ◽  
The European Union ◽  
Long Run ◽  
European Union Countries ◽  
Short Run ◽  
Per Capita ◽  
The Relationship

This paper empirically investigates the relationship between health expenditure and economic growth in the European Union countries over the period 1995-2014. By using the Dumitrescu-Hurlin Test (Dumitrescu and Hurlin, 2012) which is developed to test Granger causality in panel datasets (Lopez and Weber, 2017), it is found that there is a unidirectional relationship between these variables and gross domestic product (GDP) per capita Granger causes health expenditure per capita. After determining the direction of the relationship between health expenditure per capita and GDP per capita we estimate the short run and the long run effects of GDP per capita on health expenditure per capita by using Mean Group (MG) and Pooled Mean Group (PMG) estimators which are developed by Pesaran and Smith (1995) and Pesaran, Shin and Smith (1999) respectively. According to the estimation results, GDP per capita has a positive effect on health expenditure per capita both in the short run and the long run.

scholarly journals An Empirical Analysis on the Relationship between Health Care Expenditures and Economic Growth in the European Union Countries

2021 ◽  
Vol 4 (2) ◽  
pp. 11
Author(s):  
Çiğdem Börke Tunalı ◽  
Naci Tolga Saruç
Keyword(s):  
Economic Growth ◽  
European Union ◽  
Health Expenditure ◽  
Gdp Per Capita ◽  
The European Union ◽  
Long Run ◽  
European Union Countries ◽  
Short Run ◽  
Per Capita ◽  
The Relationship

This paper empirically investigates the relationship between health expenditure and economic growth in the European Union countries over the period 1995-2014. By using the Dumitrescu-Hurlin Test (Dumitrescu and Hurlin, 2012) which is developed to test Granger causality in panel datasets (Lopez and Weber, 2017), it is found that there is a unidirectional relationship between these variables and gross domestic product (GDP) per capita Granger causes health expenditure per capita. After determining the direction of the relationship between health expenditure per capita and GDP per capita we estimate the short run and the long run effects of GDP per capita on health expenditure per capita by using Mean Group (MG) and Pooled Mean Group (PMG) estimators which are developed by Pesaran and Smith (1995) and Pesaran, Shin and Smith (1999) respectively. According to the estimation results, GDP per capita has a positive effect on health expenditure per capita both in the short run and the long run.

scholarly journals PENGARUH INFRASTRUKTUR TERHADAP PERTUMBUHAN EKONOMI INDONESIA

2014 ◽  
Vol 17 (1) ◽  
pp. 62-98 ◽  
Author(s):  
Novi Maryaningsih ◽  
Oki Hermansyah ◽  
Myrnawati Savitri
Keyword(s):  
Growth Model ◽  
Capita Income ◽  
Sustainable Growth ◽  
Necessary Condition ◽  
Per Capita Income ◽  
Sea Transport ◽  
Solow Growth Model ◽  
Per Capita ◽  
Basic Infrastructure ◽  
Convergence Model

The disparity on per capita income is evident between Java and outside Java in Indonesia. This paper confirms this evidence using σ-convergence statistic. Furthermore, this paper identify the determinant of per capita income by adopting the Solow growth model and β-convergence model. The result emphasize confirms the availability of basic infrastructure including electricity, road and sea transport are a necessary condition to gain high and sustainable growth. In addition, the result shows the existence of β-convergence, which represents the pace of regions with lower per capita income catching up other regions with higher per capita income, in Indonesia with 1,75% speed of convergence; or equivalent with half-life of 41.14 years. Furthermore, the openness will increase the region’s productivity due to higher technology spillover. Keywords: σ-convergence, β-convergence, Solow growth model, income distribution, Gini coefficient,disparity.JEL Classification: O47, O11, O18, R11

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