Abstract:

The relationship between health expenditures with economic growth is gaining more and more importance. Especially with the Covid-19 pandemic process, health expenditures have been the subject of discussions around the world. The aim of this study is to examine the relationship between these two variables with the 2000-2019 period health expenditures and economic growth data of G7 countries (Germany, Canada, Japan, France, Italy, USA and United Kingdom). In the empirical part, panel LLC and panel IPS unit root tests, which are the main studies suggesting unit root testing for panel data models, were applied. The cointegration relationship between the variables was tested with Pedroni and Kao cointegration tests. FMOLS and DOLS methods were used to estimate the final unbiased coefficients of the cointegration relationship. The coefficient values included in the findings were positive and significant for all countries and the panel in general. Panel FMOLS and DOLS results are consistent with each other, indicating that the increase in health expenditures increases economic growth.

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