OBJECTIVES: To examine the dynamic relationships between various measures of economic status and physical health using a sample of working-age adults (18-64 years) in the US. The study examined the effect of positive and negative changes in economic status on health, and improvement and decline in health on economic status. METHODS:  The study utilized a retrospective observational longitudinal design with repeated measures of economic indicators and health for a period of 14 years using 8 waves of the Panel Study of Income Dynamics: 1999, 2001, 2003, 2005, 2007, 2009, 2011, and 2013. Health measures were self-rated health (SRH) and functional limitations; economic indicators were family income, labor income and net wealth. Four approaches of panel models:1) System-Generalized Method of Moment (system-GMM); 2) first-difference; 3) first-difference with instrumental variables (IV); 4) Lagged fixed effects; and two standard models: 1) ordinary least squares regression (OLS) and 2) IV OLS were used to evaluate the dynamic relationships between economic indicators and health measures. RESULTS:  Standard models revealed significant positive relationships between all economic indicators and SRH and negative relationships between all economic indicators and functional limitations. System-GMM estimators revealed that SRH was positively associated with family income (ß=0.871, p <0.05), labor income (ß=0.868 p < 0.001) and net wealth (ß=0.317, p < 0.001). Nevertheless, only labor income (ß=-0.515, p < 0.001) and net wealth (ß=-0.142, p < 0.05) were negatively associated with functional limitations. SRH declined due to losses in family income; decreases in SRH resulted in losses in family income, labor income and net wealth.  CONCLUSIONS: Our findings suggest the need for integrating the economic and health policies and programs to prevent the adverse effects on health whenever an individual experiences either a decline in economic status or decline in health.