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

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  • Pieroni, Luca

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.

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File URL: http://www.sciencedirect.com/science/article/B6VB1-4WM0538-2/2/69057074edb7f97fe3cab4244106c788
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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 26 (2009)
Issue (Month): 6 (November)
Pages: 1300-1309

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Handle: RePEc:eee:ecmode:v:26:y:2009:i:6:p:1300-1309

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Web page: http://www.elsevier.com/locate/inca/30411

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Keywords: Military spending Private consumption Crowding out/in;

References

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Citations

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Cited by:
  1. Chen, Pei-Fen & Lee, Chien-Chiang & Chiu, Yi-Bin, 2014. "The nexus between defense expenditure and economic growth: New global evidence," Economic Modelling, Elsevier, vol. 36(C), pages 474-483.
  2. Pieroni, Luca & Lorusso, Marco, 2013. "The Role of Fiscal Policy Components in Private Consumption: a Re-examination of the Effects of Military and Civilian Spending," MPRA Paper 47878, University Library of Munich, Germany.
  3. Wang, Tung-Pao & Shyu, Stacy Huey-Pyng & Chou, Han-Chung, 2012. "The impact of defense expenditure on economic productivity in OECD countries," Economic Modelling, Elsevier, vol. 29(6), pages 2104-2114.

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