Abstract
This study focused on medical care in a single country (China) and in regions with different economic backgrounds and different economic development levels to determine the effect of healthcare expenditure on short- and long-term economic growth. The study supported some interesting conclusions: (1) For most areas of China, increasing healthcare expenditure has a negative impact on economic growth in the short term but promotes growth in the long run; (2) Under different levels of economic development within China, there is significant heterogeneity in the interaction between healthcare expenditure and economic growth; (3) The negative effects of healthcare expenditure on short-term economic growth are greater during periods of economic turbulence than during times of stability; and (4) Healthcare expenditure has a negative effect on underdeveloped areas through the accumulation of material capital, while in economically developed areas, this channel has the opposite effect. To improve the quality of medical and health protection and the quality of life and welfare, China needs to consider the development characteristics of different economic zones and establish a multilevel, systematic and diversified medical and health protection system.
Highlights
In early 2020, COVID-19 unexpectedly swept the world, with more than 80 million people diagnosed and nearly two million dead in less than a year
The ADF test is carried out to measure the material capital accumulation and human capital accumulation of the possible transmission path of the economic growth effect of health expenditure in different economic regions, and the consequences are put into Table 3
The historical characteristics of the evolving effect of China’s healthcare expenditure on economic growth are analyzed by the time-varying parameter method, and the possible transmission path for the healthcare expenditure effect on shortterm and long-term economic growth is discussed based on the pulse response method
Summary
In early 2020, COVID-19 unexpectedly swept the world, with more than 80 million people diagnosed and nearly two million dead in less than a year. Governments worldwide launched a series of targeted measures to protect people’s health and save their economies. It is not possible to both “protect people’s livelihood” and “promote the economy.”. Even countries that try to maintain economic activities with the expectation that mass immunization will take effect may find that this strategy does little to maintain the normal operation of the economy. China was the first country to confront this new epidemic, but it took the lead in restoring economic order under the epidemic, which was closely related to the anti-epidemic disaster relief provided by the government for the Chinese people regardless of the cost.
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