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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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  • Pieroni, Luca, 2009. "Does defence expenditure affect private consumption? Evidence from the United States," Economic Modelling, Elsevier, vol. 26(6), pages 1300-1309, November.
    • Handle: RePEc:eee:ecmode:v:26:y:2009:i:6:p:1300-1309
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