International trade and health expenditure as determinant of humandevelopment: the case of very high human development countries

Human development index (HDI) is the better instrument rather than GrossDomestic Production (GDP) to measure welfare. HDI include other aspects ofwelfare such education and health. So, since 1990, that HDI introduced byUNDP1 several studies have been presented about it.In this paper, impacts ofinternational trade and per capita health expenditure surveyed. To this end,data of 39 countries that classified as very high human development countriesby UNDP, are collected over the period 2005-2011and final model beestimated by panel data approach. Also, the causality between trade andhuman development examined by Granger causality test.Study results show that per capita trade and health expenditure have positiveimpact on human development. So, if per capita trade and health expendituregrowth rates change 1 percent, human development index growth rate increase0.018-0.0195 and 0.011-0.012 percent, respectively. The results of Grangercausality test indicate that per capita trade and health expenditure growth ratesare granger causality of human development index growth rate, but reversecausality direction not be seen.

Keywords:

international trade , health expenditure , human development index , Panel data , granger causality