THE SHORT AND LONG RUN CAUSALITY RELATIONSHIP BETWEEN PUBLIC HEALTH SPENDING AND ECONOMIC GROWTH: EVIDENCE FROM TUNISIA AND MOROCCO

This study aims to analyze the short run and long run relationship link between economic growth and public health spending in Tunisia and Morocco cover the 1980-2017 periods. The basic analysis process involves four steps: stationarity test, Bound tests for Cointegration, ARDL approach inspired by Pesaran et al. (2001), and VECM method. The results confirm the existence of cointegration between variables. In long run, public health spending affects positively the Tunisian and Moroccan economic growth, but more intensively in Tunisia. The short run causal relationships exist between variables and the result of Granger causality indicate the existence of positive bidirectional causal relationships between economic growth and public health spending in both countries. The results warrant for the attention of Tunisian and Moroccan governments to investigate more in health sector as a factor of economic growth. In addition, these two governments should give the attention of their monetary policy and corruption.