Essays on Health and Economic Growth

For economists who study the growth theories, the most critical issues they are trying to deal with are the sources of long-term growth and the problem of inequality. Stimulated by the endogenous growth theories, a substantial amount of studies focus on how technology improvement and human capital in education promote economic growth. In this thesis, however, we focus on another important source of growth, the role of health in generating economic growth and generating development traps. We discuss the issues of long-term growth and inequality in the first two essays respectively and examine empirically the relationship between health and economic growth in the last essay.;In the first essay, we analyze the endogenous growth generated by health accumulation. We extend the Barro (1996b) model to consider both the positive and negative effects of health by endogenizing the health depreciation rate. We consider three forms of health depreciation rate: constant health depreciation rate, health depreciation rate determined only by health, and health depreciation rate determined simultaneously by health and education. We also consider the situation when health affects economic growth through entering the utility function directly. By comparing the results from the optimization processes, we find that whether health enters the utility function does not affect long-term growth. What really matters is the specific form of health depreciation rate.;In the second essay, we analyze the issue of health related development traps. Various mechanisms of health related development traps have been proposed by recent literature. The general characteristics of these mechanisms are that there are stable multiple equilibriums. However, the statistics show that the gap between the rich countries and the poor ones are actually widening from 1960 to 2007. To explain this phenomenon, we develop another mechanism to generate health related development traps, through which the gap between the developed and developing countries is widening. To check the sensitivity of the results to the specific form of health utility function, we also employ a more general form of health utility function.;In the last essay, we complement the first two essays by analyzing empirically the relationship between health expenditure and economic growth. We summarize that there are three main categories of macroeconomic empirical research on the relationship between health and economic growth. Relatively few focuses on how health investment affects economic growth. We analyze this relationship in the last essay by employing both the Mankiw, Romer and Weil (1992) model and the Bassanini and Scarpetta (2001) model. Several econometric methods are used for robustness checking. The statistical results show that health expenditure at least has non-negative effect on economic growth.