Article by Julien Malizard accepted for publication in Economic Modelling.
«This article explores the effects of military expenditure on private investment in France, for 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 between military equipment and private investment are complementary to one another.»
