Contents

ii Health care expenditures have been rising all around the globe. When it comes to explaining why, aging of the population is often put forward as one of the main causes. There is little attention for the role of other macro-economic variables in this process. This research shows that such variables are generally of more importance when it comes to explaining the rise in health care expenditures, at least in the OECD countries. The correlation between aging of the population and health care expen-ditures is altered when a few macro-economic variables are added into the analysis. These findings confirm the existence of a ’red herring’. The results of this paper have several policy implications. Regression analyses and literature studies are the main methods of research