Journal of Business & Economic Policy

ISSN 2375-0766 (Print), 2375-0774 (Online) DOI: 10.30845/jbep

A Study Investigating the Effects of Health and Energy Consumption on Economic Growth in the US by using the ARDL Bounds Testing and Variance Decomposition Approach
Hung-Ming Wu, Shu-Chin Su

The purpose of this study was to explore the effects of energy consumption and health (with Life expectancy at birth as a proxy) on economic growth in the US using the neo-classical production function. The Autoregressive distributed lag (ARDL) bounded testing approach with additional variables (energy consumption and health) was used to investigate co integration during the period of 1960-2013 in the US. The Variance Decomposition approach was also used to check the robustness. The ARDL revealed a co integration relationship among energy consumption, health, capital and economic growth. The dimension of Energy consumption revealed only shortrun impacts on economic development. Health had only long-run impacts on economic growth, while Capital had both short and long-run impacts. As a result, energy conservation policies can be implemented since energy consumption only displayed short- term effects on economic growth. It is suggested that the US government could boost economic growth by increasing budget levels directed at health

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