In the present paper an attempt has been made to examine the interdependency between the public health expenditure (PHE) and gross state domestic product (GSDP) i.e. economic growth in Haryana over the period of 2005–2012. The study takes into account the recent advances in econometric techniques. The study applies the Granger causality test to analyze the causality between gross state domestic product (GSDP) and public health expenditure (PHE). Bilateral relationship between public health expenditure and economic growth has been analyzed. In other words, the study supports Keynesian hypothesis and Wagner's hypothesis both. More specifically, the study concludes that Public health expenditure Granger causes growth of the state (GSDP) and growth of the state (GSDP) Granger causes the public health expenditure, implying thereby a feedback relationship exists between public health expenditure and economic growth of the Haryana state (GSDP).
Unit root, ADF, Granger causality, Economic growth(GSDP), Public health expenditure(PHE), Haryana, Wagner's law, Keynesian law
