The Dynamic Links Between Natural Disaster, Health Spending, and GDP Growth: a Case Study for Lower Middle-Income Countries

This paper aims to empirically analyze the relationship between natural disaster, health spending, urban population, gross fixed capital formation, and gross domestic product (GDP) per capita for lower middle-income countries. The data cover the period 2000–2019. The methodological approach used is based on Granger causality and Vector Error Correction Model (VECM) procedures. Empirical result reveals that GDP per capita and health spending are correlated positively with urban population. The results also indicate that there is a one-way relationship running from natural disaster to GDP per capita and from natural disaster to health spending in short and long run, while two-way relationship between health spending and urban population in short term. In long run, there is two-way relationship between GDP per capita and health spending.