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Causal Nexus Between Public Health Expenditure and Economic Growth in Four Southern Indian States

B Balaji

The IUP Journal of Public Finance, 2011, vol. IX, issue 3, 7-22

Abstract: The relationship between health expenditure and economic growth has drawn the attention of economists for many years both at the theoretical and empirical level. This paper investigates the possible dynamic relation between Healthcare Expenditure (HCE) and economic growth by applying Johansen and Juselius cointegration method and Granger causality methods by using state-level data from four Southern Indian states namely, Andhra Pradesh, Karnataka, Kerala and Tamil Nadu for the period 1960-2009. The evidence suggests that there is no long-run relation among the variables studied for all four states. However, in Andhra Pradesh, a unidirectional causality runs from economic growth to health expenditure.

Date: 2011
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