Does defence expenditure affect private consumption? Evidence from the United States

Luca Pieroni

Economic Modelling, 2009, vol. 26, issue 6, 1300-1309

Abstract: This paper empirically discusses the relationship between government defence expenditure and private consumption for the United States. The estimations show a substitution or complementary effect of the military sector on private categories of consumer choices, although sensitivity analysis for different utility functions and sub-samples indicates a time-decrease on substitutability. Our findings are in line with previous results highlighting a weak substitution of defence expenditure on aggregate consumption.

Keywords: Military; spending; Private; consumption; Crowding; out/in (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:26:y:2009:i:6:p:1300-1309

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