Does military expenditure crowd out private investment? A disaggregated perspective for the case of France
Language
EN
Article de revue
This item was published in
Economic Modelling. 2015, vol. 46, p. 44-52
English Abstract
This article explores the effects of military expenditure on private investment in France, for the period between 1980 and 2010. Using a Keynesian model, our empirical results reveal that military spending crowds out private ...Read more >
This article explores the effects of military expenditure on private investment in France, for the period between 1980 and 2010. Using a Keynesian model, our empirical results reveal that military spending crowds out private investment, a result commonly accepted in the literature. However, our approach is original in that we use disaggregated data. Such an approach distinguishes between the effects of non-equipment expenditure which crowds out investment and those of equipment expenditure which crowds in investment. As a result, we show that military equipment and private investment are complementary to one other.Read less <
English Keywords
Cointegration
Crowding-in
Crowding-out
Investment
Military expenditure