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Effect of health on economic growth in Ghana:An application of ARDL bounds test to cointegration

Boachie, Micheal Kofi (2015): Effect of health on economic growth in Ghana:An application of ARDL bounds test to cointegration.

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Abstract

In this paper, the growth effect of health in Ghana is examined for the period 1982 to 2012. We use life expectancy at birth as a proxy for health, and real per capita GDP as a proxy for economic growth. After employing ARDL bounds test approach to cointegration, and controlling for the effects of education, international trade, FDI, inflation, and accumulation of physical capital, we find that economic growth is significantly driven by health, both in the short and long run. However, the favourable growth effect of health in the short run is found to be lower.The implication is that improvement in health status of the population raises output in the economy. In this regard, policy should aim at raising health sector investment and strengthen the healthcare system to improve health status.

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