New Oil Price Crisis, and Health Costs: Impact on the OECD Economy: Insights From a Novel IV-Quantile-Quantile Analysis

Abstract

This study employs an innovative instrumental variable (IV) quantile regression approach to analyze the impact of oil price fluctuations and healthcare costs on economic growth across various income levels in OECD countries from 1970 to 2022. The analysis demonstrates that oil prices and healthcare expenditures significantly affect growth in lower-income regions, with these effects diminishing at higher-income levels. These findings underline the necessity for tailored policy interventions that promote sustainable growth by optimizing the benefits of oil prices and healthcare investments while mitigating associated risks, such as inflation. Additionally, enhancing healthcare access in less-developed regions is crucial for fostering inclusive economic progress. The study emphasizes the vital roles of energy markets and healthcare systems in informing effective economic development strategies.