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Health Spending and Growth in Ghana: An Examination of Causality

C. Barnor E., E.E. Asmah, E.A. Wiafe

Abstract


The role of government spending in health is argued to affect the nation’s economic development. This is so because, healthy citizens help boost productivity. However, causality between the two variables is ambiguous in academic literature on health spending and growth. This study therefore, set out to examine the nature of causality between government spending and growth. Using a simple Granger causality test, it was found out that the causality flows from both directions. Thus health spending granger causes growth and vice versa. It is therefore recommended that, government should pay attention to spending in medical care as well as creating conducive environment that propels economic growth. This would in the long run lead to growth of the economy.

Keywords


growth, VEC, health expenditure, causality test, health and growth.

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