Conceptualizing the Bidirectional Relationship Between Macroeconomic Stability and Public Health Systems: A Systematic Analysis of Feedback Loops and Dynamic Equilibrium Models

Abstract

This research examines the bidirectional relationship between economic indicators and health system performance through a comprehensive analysis of feedback mechanisms and dynamic equilibrium models. The study develops a novel mathematical framework that captures the nonlinear interactions between fiscal policy variables, health expenditure allocations, and population health outcomes. Using advanced econometric modeling techniques, we establish that macroeconomic volatility reduces health system efficiency by approximately 15-25\%, while robust public health infrastructure contributes to economic stability through reduced productivity losses and enhanced human capital formation. The analysis reveals that countries maintaining health expenditure above 7\% of GDP demonstrate significantly greater resilience to economic shocks, with recovery times shortened by an average of 18 months compared to nations with lower health investment ratios. Furthermore, the research identifies critical threshold effects where health system capacity constraints amplify economic downturns, creating potentially devastating feedback loops. The findings suggest that integrated policy frameworks addressing both macroeconomic management and health system strengthening can generate substantial welfare gains, with optimal resource allocation models indicating potential GDP improvements of 2-4\% through strategic health investments. These results have profound implications for sustainable development strategies and crisis preparedness planning.