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

  • Pieroni, Luca

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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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
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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