Mutual influence of health care spending and Russia’s GDP (2000–2021)

Abstract

The purpose of the study is to study and analyze the mutual influence of public spending on health care and the gross domestic product (GDP) of Russia for the period from 2000 to 2021. To identify the possible influence of the analyzed variables, we used correlation analysis (correlation estimates and lead-lag relationships) based on discrete and continuous wavelet transforms of variables, which allows you to identify correlations between the analyzed variables that change over time and at different investment horizons, taking into account also direction of influence. The results of the study indicate a significant positive mutual influence of healthcare spending and Russia’s GDP on all time scales from 1 to 20 years: an increase in healthcare spending leads to an increase in Russia’s GDP and vice versa, an increase in Russia’s GDP leads to an increase in healthcare spending. In addition, it is shown that, on short time cycles from 0 to 5 years, throughout the time range (2000-2021), GDP growth leads to an increase in health care spending, and on longer time cycles from 15 to 20 years, there is an inverse relationship: an increase in healthcare spending leads to an increase in Russia’s GDP. The paper demonstrates the necessity and effectiveness of applying wavelet transformations when conducting correlation analysis, in cases where the economic relations between the analyzed variables follow different patterns on different investment horizons, and it is wavelet analysis that makes it possible to reveal the most interesting characteristics of the relationship of variables, which otherwise would remain hidden. The practical significance of the results of the work is determined by the fact that it is shown that spending on health care, aimed at improving the health of the nation, increases human potential and labor productivity, thereby increasing the economic activity and welfare of the country.