HEALTH AND ECONOMIC DEVELOPMENT: A GRANGER CAUSALITY ANALYSIS

Abstract

Health and Economic development are interdependence, interrelated and interconnected
to each other. Health impacted economic development through reduction in production and
productivity losses. The main objective of this paper is to examine the relationship between
Health and economic development. In order to examine the relationship between the two, various
indicators of health and economic development are analyzed. The model undertaken in our study
is multivariate regression time series and to carry Multivariate time series analysis Vector
Autoregressive (VAR) model is used. To detect the direction of causality and to identify which
variable acts as determining factor for another variable, Granger causality test is analyzed. Our
analysis shows that lagged of population growth, GNI per capita, life expectancy, TFR, IMR,
GDP and GPS granger-cause GDP growth. We have found life expectancy being granger-cause
by lagged of GDP growth rate, total population, GNI per capita, CDR, TFR, IMR, GDP. Again
IMR is granger-cause by GPS, GDP growth rates, life expectancy, CDR, TFR, GDP, GS, and
GNI per capita.