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An Unconventional Way to Support Health Expenditure And A Gain In Output As By-product

Nizam, Ahmed Mehedi (2021): An Unconventional Way to Support Health Expenditure And A Gain In Output As By-product.

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Abstract

Using 2011-2015 data, here we have shown empirically that a 0.42%-0.52% levy on every non-bank, non-cash transaction using payment instruments is enough to meet up the annual healthcare expenditure in the representative countries of the EU (European Union) region. For Emerging Asia (EA), Mature Asia and the Pacific (MAP) and North America (NA) this value is found to be 0.14%-0.28%, 0.59%-0.67% and 1.64%-1.83% respectively. Moreover, the total out of pocket expenses can be supported by a 0.06%-0.07%, 0.05%-0.12%, 0.15%-0.17% and 0.19%-0.21% levy on each non-bank, non-cash transaction using payment instruments in EU, EA, MAP, and NA region respectively. Here, we also analyze the implication of the aforementioned levy on aggregate output in one representative country in the NA region and it suggests a substantial gain in output would follow the implementation of the proposed scheme. Although, not reported here, a similar gain in output would have been obtained for the other countries in the list as well stemming from the fact that government spending multipliers are theoretically and empirically higher than its tax counterparts.

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