Munich Personal RePEc Archive

The "Crowding Out" Effect of Federal Government Outlay Decisions: An Empirical Note

Cebula, Richard and Carlos, Christopher and Koch, James (1980): The "Crowding Out" Effect of Federal Government Outlay Decisions: An Empirical Note. Published in: Public Choice , Vol. 36, No. 2 (25 March 1981): pp. 329-336.

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Abstract

This note has addressed the empirical issue of crowding out by examining the proportion of GDP devoted to private investment in new physical capital in part as a function of the proportion of GDP devoted to federal government outlays. Three alternative models were estimated, all of which revealed evidence of (a) a definite pattern in which private investment is crowded out by government spending and (b) only partial, i.e., incomplete, crowding out.

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