Acta Oeconomica Pragensia
Acta Oeconomica Pragensia
Acta Oeconomica Pragensia
Journal of Central and Eastern European Economic and Management Issues

Acta Oeconomica Pragensia 2018/3

Economic Growth and Health Dynamics with Government Subsidies for Healthcare


[plný text (PDF)]

Wei-Bin Zhang

The aim of this paper is to examine the dynamic interdependence between wealth accumulation and health change with government health policy. The paper focuses on how government health policy affects health change, economic growth and the dynamics of government debt within a dynamic general equilibrium framework proposed by Zhang. Economic growth, health change and government debt dynamics are interrelated with different preferences and government health policy. After building the general equilibrium model, it is demonstrated that the movement of the economic system is provided by three nonlinear differential equations. We simulate the differential equations and show how the economic system moves from its initial state. A comparative dynamic analysis is conducted in order to examine how changes in some exogenous conditions affect short-run transitory processes and the equilibrium structure.

JEL klasifikace: H51, I15, O41

Abel, A., Bernanke, B. S. and Croushore, D. (2007). Macroeconomics. New Jersey: Prentice Hall.

Acemoglu, D. and Johanson, S. (2007). Disease and Development: The Effect of Life Expectancy.

Journal of Political Economy, 115(6), pp. 925-985, 10.3386/w12269

Baltagi, B. H. and Moscone, F. (2010). Health Care Expenditure and Income in the OECD Reconsidered: Evidence from Panel Data. Economic Modelling, 27(4), pp. 804-811,

Bedir, S. (2016). Health Care Expenditure and Economic Growth in Developing Countries. Advances in Economics and Business, 4(2), pp. 76-86,

Bloom, D. E. and Canning, D. (2003). The Health and Poverty of Nations: From Theory to Practice. Journal of Human Development, 4(1), pp. 47-71,

Bloom, D. E., Canning, D. and Sevilla, J. (2004). The Effect of Health on Economic Growth:

A Production Function Approach. World Development, 32(1), pp. 1-13,

Burmeister, E. and Dobell, A. R. (1970). Mathematical Theories of Economic Growth. London: Collier Macmillan Publishers.

Chen, W., Clarke, J. A. and Roy, N. (2014). Health and Wealth: Short Panel Causality Tests for

Developing Countries. Journal of International Trade & Economic Development, 23(6), pp. 755-784,

Diamond, P. (1965). National Debt in a Neoclassical Growth Model. American Economic Review,

55(5), pp. 1126-1150.

Eggoh, J., Houeninvo, H. and Sossou, G. A. Hilaire, E. J. and Gilles, A. S. (2015). Education, Health

and Economic Growth in African Countries. Journal of Economic Development, 40(1),

pp. 93-111.

Ehrlich, I. and Chuma, H. (1990). A Model of the Demand for Longevity and the Value of Life

Extension. Journal of Political Economy, 98(4), pp. 761-782,

Forster, B. A. (1989). Optimal Health Investment Strategies. Bulletin of Economic Research, 41(1), pp. 45-57,

Grossman, M. (1972). On the Concept of Health Capital and the Demand of Health. Journal of Political Economy, 80(2), pp. 223-255,

Johansson, P. O. and Löfgren, K. G. (1995). Wealth from Optimal Health. Journal of Health

Economics, 14(1), pp. 65-79,

Miles, D. and Scott, A. (2005). Macroeconomics – Understanding the Wealth of Nations.

Chichester: John Wiley & Sons, Ltd.

Murray, C. J. L., Govindaraj, R. and Musgrove, P. (1994). National Health Expenditures: A Global

Analysis. Bulletin of the World Health Organization, 72(4), pp. 623-637.

Newhouse, J. P. (1977). Medical Care Expenditure: A Cross-National Survey. Journal of Human

Resources, 12, pp. 115-125,

Parkin, D., McGuire, A. and Yle, B. (1987). Aggregate Health Care Expenditures and National Income: Is Health Care a Luxury Good? Journal of Health Economics, 6(2), pp. 109-127,

Posnett, J. and Hitiris, T. (1992). The Determinants and Effects of Health Expenditure in Developed Countries. Journal of Health Economics, 11(2), pp. 173-181,

Schultz, P. (1999). Health and Schooling Investments in Africa. Journal of Economic Perspectives, 13(3), pp. 67-88.

Solow, R. (2000). Growth Theory – An Exposition (2nd ed.). New York: Oxford University Press.

Strauss, J. and Thomas, D. (1998). Health, Nutrition, and Economic Development. Journal of Economic Literature, 36(2), pp. 766-817.

Tobing, E. (2011). Public Health Spending, Tax Reform, and Long-Run Growth. Economics Letters, 112(1), pp. 119-121.

Van Zon, A. and Muysken, J. (2001). Health and Endogenous Growth. Journal of Health Economic, 20, pp. 169-185,

Well, D. N. (2007). Accounting for the Effect of Health on Education Growth. The Quarterly Journal of Economics, 122(3), pp. 1265-1306,

Yavuz, N. C., Yilanci, V. and Ozturk, Z. A. (2011). Is Health Care a Luxury or a Necessity or Both?

Evidence from Turkey. European Journal of Health Economics, 14(1), pp. 5-10,

Zhang, W. B. (1993). Woman’s Labor Participation and Economic Growth – Creativity,

Knowledge Utilization and Family Preference. Economics Letters, 42(1), pp. 105-110,

Zhang, W. B. (2005). Economic Growth Theory. London: Ashgate.

Zhang, W. B. (2016). Public Debt and Economic Growth in Uzawa’s Two-Sector Model with Public Goods. International Journal of Economic Sciences, 5(4), pp. 51-72,

Zhang, W. B. (2018). Dynamic Interactions Between Health, Human Capital and Wealth. Academicus International Scientific Journal, 17(January), pp. 122-145.

Licence Creative Commons This work is licensed under a Creative Commons Attribution 4.0 International License.

Current issue



Tereza Voráčková, Alexandr Potůček, Filip Sýkora, Jaroslav Schönfeld
Pre-packed insolvencies

Milen Velev
Unemployment and economic growth: Is there a relationship in the European Uninon?

Dagmar Brožová
The minimum wage in the neoclassical and the behavioural labour market theory

Václav Žalud, Jan Králíček
Value added tax in reorganisation

Pavel Sirůček, Zuzana Džbánková
Radovan Richta – The predecessor of the Club of Rome and the 4.0 vision