Can we declare military Keynesianism dead?
Luca Pieroni (),
Giorgio D’Agostino and
Marco Lorusso ()
Authors registered in the RePEc Author Service: Giorgio d'Agostino ()
No 44/2008, Quaderni del Dipartimento di Economia, Finanza e Statistica from Università di Perugia, Dipartimento Economia
This paper empirically tests the Keynesian hypothesis that government defence spending positively impacts on aggregate output, by using a long run equilibrium model for the US and the UK. Our contribution, with respect to previous works, is twofold. First, our inferences are adjusted for structural breaks exhibited by the data concerning fiscal and monetary variables. Second, we take into account different dynamics between defence spending on aggregate output, showing that the results are sensitive to sub-sample choices. Though the estimated elasticities in both countries show a lack of significance in the more recent years of the sample, defence spending priorities addressed to international security may revitalize pro-cyclical effects in the UK, by an industrial policy of defence shared with the EU members.
Keywords: Military spending; Output; Long run models (search for similar items in EconPapers)
JEL-codes: E12 E52 E62 H56 (search for similar items in EconPapers)
Pages: 24 pages
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Journal Article: Can we declare military Keynesianism dead? (2008)
Working Paper: Can We Declare Military Keynesianism Dead? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:pia:wpaper:44/2008
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