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

Human development index (HDI) is the better instrument rather than Gross Domestic Production (GDP) to measure welfare. HDI include other aspects of welfare such education and health. So, since 1990, that HDI introduced by UNDP1 several studies have been presented about it.In this paper, impacts of international trade and per capita health expenditure surveyed. To this end, data of 39 countries that classified as very high human development countries by UNDP, are collected over the period 2005-2011and final model be estimated by panel data approach. Also, the causality between trade and human development examined by Granger causality test. Study results show that per capita trade and health expenditure have positive impact on human development. So, if per capita trade and health expenditure growth rates change 1 percent, human development index growth rate increase 0.018-0.0195 and 0.011-0.012 percent, respectively. The results of Granger causality test indicate that per capita trade and health expenditure growth rates are granger causality of human development index growth rate, but reverse causality direction not be seen.

Keywords:

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