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A Note on "Crowding Out" in the United States

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  • Cebula, Richard
  • Cebula, Barbara

Abstract

This study examines the existence of crowding out in the United States by determining to what degree the proportion of actual GNP that was devoted to investment was affected by the proportion of GNP devoted to federal government spending. The empirical results in the regression estimation tentatively indicate that private investment in new capital is in fact crowded out by federal government outlays. Nevertheless, the evidence in this regression indicates also that although crowding out does occur, it is incomplete.

Suggested Citation

  • Cebula, Richard & Cebula, Barbara, 1979. "A Note on "Crowding Out" in the United States," MPRA Paper 56991, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:56991
    as

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    File URL: https://mpra.ub.uni-muenchen.de/56991/1/MPRA_paper_56991.pdf
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    References listed on IDEAS

    as
    1. Benjamin M. Friedman, 1978. "Crowding Out or Crowding In? Economic Consequences of Financing Government Deficits," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 9(3), pages 593-641.
    2. Cebula, Richard J, 1978. "An Empirical Analysis of the "Crowding Out" Effect of Fiscal Policy in the United States and Canada," Kyklos, Wiley Blackwell, vol. 31(3), pages 424-436.
    3. John E. Floyd & J. Allan Hynes, 1978. "Deficit Finance and 'First-Round' Crowding Out: A Clarification," Canadian Journal of Economics, Canadian Economics Association, vol. 11(1), pages 97-105, February.
    4. Ostrosky, Anthony, 1979. "An Empirical Analysis of the 'Crowding Out' Effect of Fiscal Policy in the United States and Canada: Comment and Extensions," Kyklos, Wiley Blackwell, vol. 32(4), pages 813-816.
    5. Benjamin M. Friedman, 1978. "Crowding Out Or Crowding In? The Economic Consequences of Financing Government Deficits," NBER Working Papers 0284, National Bureau of Economic Research, Inc.
    6. Anthony Ostrosky, 1979. "An Empirical Analysis Of The ‘Crowding Out’ Effect Of Fiscal Policy In The United States And Canada: Comment And Extensions," Kyklos, Wiley Blackwell, vol. 32(4), pages 813-816, November.
    7. Michael W. Keran, 1970. "Monetary and fiscal influences on economic activity : the foreign experience," Review, Federal Reserve Bank of St. Louis, vol. 52(Feb), pages 16-28.
    8. Buiter, Willem H., 1977. "`Crowding out' and the effectiveness of fiscal policy," Journal of Public Economics, Elsevier, vol. 7(3), pages 309-328, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    crowding out of investment; government purchases as percent of GDP; partial crowding out;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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