Can we declare military Keynesianism dead?

Luca Pieroni, Giorgio d'Agostino, Marco Lorusso

Research output: Contribution to journalArticlepeer-review

24 Citations (Scopus)


This paper empirically tests the Keynesian hypothesis that government defence spending positively impacts on aggregate output, by using a long-run equilibrium model for the US and the UK.

Our contribution, with respect to previous works, is twofold. First, our inferences are adjusted for structural breaks exhibited by the data concerning fiscal and monetary variables. Second, we take into account different dynamics between defence spending on aggregate output, showing that the results are sensitive to sub-sample choices. Though the estimated elasticities in both countries show a lack of significance in the more recent years of the sample, defence-spending priorities addressed to international security may revitalize pro-cyclical effects in the UK, by an industrial policy of defence shared with the EU members.
Original languageEnglish
Pages (from-to)675-691
JournalJournal of Policy Modeling
Issue number5
Publication statusPublished - Sept 2008


  • Military Spending; Output; Long-run Models


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