Can We Declare Military Keynesianism Dead?
Luca Pieroni (),
Giorgio d'Agostino () and
Marco Lorusso ()
No 804, Working Papers from Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol
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: D12 H31 H4 (search for similar items in EconPapers)
Pages: 24 pages
New Economics Papers: this item is included in nep-pke
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http://carecon.org.uk/DPs/0804.pdf First version, 2008 (application/pdf)
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:uwe:wpaper:0804
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