Development of Urbanization Index Model using Multi-dimensional Approach

This paper explores the causal relation among trade liberalization, health expenditures and economic growth of Pakistan. We use annual data for the period of 1976–2010. Johansen Cointegration, Error Correction and Granger Causality/Block Exogeneity Wald tests are applied to check the relation among the variables under investigation. Our main outcomes are as: (i) There is long run associationship among GDP growth, trade liberalization and health expenditures. (ii) Speed of adjustment is showing convergence to long run with the speed of 4.45% annually. (iii) There is bidirectional causal link between GDP growth and trade liberalization in short run. (iv) There exists no causal relationship between GDP and health. (v) There exists unidirectional causality from health to trade in short period of time. Therefore, we note that trade liberalization and health care facilities can bring prosperity and encourage people to share in the trade liberalization. It is suggested to allocate fair budgetary share for health sector. Present study also suggests policies for trade liberalization as it is necessary for sustainable growth.