The purpose of this paper is to construct a theoretical framework for analyzing the connection between economic growth, demand for medical care, and economic health.
The economy is composed of two sectors, one of medical care goods and the other of consumption goods. Equilibrium is defined when capital per‐capita in period t is equal to that of period t+1.
An equilibrium path is found for the demand for consumption and for medical care goods, per‐capita level of health, capital, savings, trade balance, and net foreign assets.
The importance of the paper is in its ability to analyze the change in public health along the growth path of the economy.
An example and a simulation are presented in order to confirm the theoretical results and demonstrate that the model can be used for empirical analysis.
The paper constructs a connection between economic growth and health sector economic developments.
