Proceedings of the 9th International Academic Conference, Istanbul

THE RELATIONSHIP BETWEEN PUBLIC SPENDING ON HEALTH AND ECONOMIC GROWTH IN ALGERIA: TESTING FOR COINTEGRATION AND CAUSALITY

FATIMA BOUSSALEM, ZINA BOUSSALEM, ABDELAZIZ TAIBA

Abstract:

This paper investigated the causality and co-integration relationships between public health expenditure and economic growth in Algeria during 1974-2014 using annual data. This paper concentrated on time series co-integration and causality in VECM framework. The findings revealed that there is a long-run causality from public health expenditure to economic growth, while it is not observed any short-run causality from expenditure health to economic growth. The lack of strong link from health to economic growth is not necessarily a reason to reallocate health investment away from the health sector. The improvements in health status will be worth the effort even if they turn out to have little effect on growth.

Keywords: public Health Expenditure, Economic Growth, Co-integration, Causality

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