The positive correlation between health share expenditures and COVID-19 case fatalities in a cross-section of 31 European countries is puzzling. The positive relationships is also detected in weighted OLS and IV models that control for many usual suspects of the COVID-19 mortality: (1) health indicators (personal risk factors, medical resources), (2) virus ease of circulation, (3) macroeconomic variables related to the economic development and social orientation of the country. COVID-19 case fatalities are lower in countries with significant resources dedicated to health care (hospital beds and medical doctors); the contribution of virus circulation factors is less significant. Policy implications follow. Link to the article
BLONDEL, S. and VRANCEANU, R. (2020). COVID-19 Mortality and Health Expenditures Across European Countries: The Positive Correlation Puzzle. WP2005, ESSEC Business School.