Theoretical literature on the relationship between health and economic growth suggests that there may be a bidirectional relationship between them. Greater economic growth leads to greater investments in health, and therefore to better health. On the other hand, better health is increasingly seen as a key tool for achieving greater economic growth. The effect of economic growth on health is well known. The level of health spending depends on income or resources available in both the private and public sectors. A higher income means there is more money available to spend on health. Research in health economics indicates that changes in per capita health spending could be explained primarily by changes in GDP per capita (Gerdtham & Jonsson, 2000). There is also a theoretical basis for reverse causality, from health spending to income and economic growth. The role of health spending, as an investment, in stimulating economic growth was suggested by Mushkin. According to him, health is considered a capital. Therefore, investments in health can increase income and therefore lead to overall economic growth. (Mushkin, 1962). This is especially evident in low-income or developing countries. The 2001 World Health Organization Commission on Macroeconomics and Health report states that “expanding coverage of crucial health services to the world's poor could save millions of lives each year, reduce poverty, stimulate economic development and promote global security” (World Health Organization). Health Organization, 2001). Establishing the direction of causality between health and income has become a major issue in the field of health economics. An informal explanation of this causality is: “many people… halfway through the paper… the relationship stops being binding. (Grossman, 1972) Because of the problems associated with using life expectancy as a proxy variable for health, many authors use health spending as a proxy for health status. There are some specific reasons for this. According to the World Bank, differences in health spending between countries are a good starting point for explaining differences in health levels between countries. (World Bank, 1993). Exploring the relationship between public health spending and health status, Rivera found that increasing public health spending significantly improves both physiological and physical health. (Rivera B., 2001). Therefore, this study will use health expenditure per capita as an indicator of health and GDP per capita as an indicator of economic growth, in an attempt to identify the impact of health on economic growth..