INFLATION AND MORTALITY NEXUS: EMPIRICAL EVIDENCE FROM SOUTH ASIAN COUNTRIES

Higher inflation decreases the purchasing power, food and non-food expenditures, insufficient health care expenditure, increases poverty rate, and decline the expenditures on other basic necessities. Lower expenditures on basic necessities causes the poor nutritious/healthy diet leading to early deaths and increases chances of mortality. This research aims to analyze the effect of inflation rate on mortality in South Asian countries (like Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka). Further, to identify the effectiveness of macroeconomic determinants of mortality rate in selected countries. For empirical analysis, the data from 1972 to 2018 were collected from world development indicators (WDI), Penn world table, and UN comtrade for the selected countries. The dynamic panel model using the Generalized Method of Moments (GMM) developed by Arellano & Bond (1991) is estimated. The empirical results showed that the rate of inflation, CO2 emissions, population growth, and life expectancy rates have positive and significant impact on mortality rate. Also, higher inflation causes reduction in the overall consumption of necessities expenditures on health thus further exacerbating the mortality rate. Moreover, GDP per capita, employment, human capital, and government health expenditure significantly negatively impact the mortality rate. It is suggested that institutions are required to maintain price stability through effective monetary and fiscal policies to safeguard household consumption of essential goods and health services, thereby reducing inflation-induced mortality. The government is required to enhance the public sector expenditures in the health sector for equitable access to quality healthcare. Further, the government in selected countries should promote such programs to reduce CO2 emission and population growth.