On stationarity and cointegration of international health expenditure and GDP

Abstract

This paper examines stationarity and cointegration of health expenditure and GDP, for a sample of 21 OECD countries using data for the period 1960-1997, by applying a test battery that allows robust inference to be made on the stationarity and cointegration issue. Trend stationarity and no-cointegration are tested using new country-by-country and panel tests, not previously applied in this setting. New results for country-by-country and panel tests of non-stationarity and cointegration are presented. Our unit root and trend stationarity results indicate that both health expenditure and GDP are non-stationary. The no-cointegration and cointegration results indicate that health expenditure and GDP are cointegrated.