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Does military expenditure crowd out private investment? A disaggregated perspective for the case of France

Author

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  • J. Malizard

    (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)

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 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.

Suggested Citation

  • J. Malizard, 2015. "Does military expenditure crowd out private investment? A disaggregated perspective for the case of France," Post-Print hal-02272371, HAL.
    • Handle: RePEc:hal:journl:hal-02272371
    DOI: 10.1016/j.econmod.2014.10.049
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    References listed on IDEAS

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