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Macroeconomics Commons

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Illinois Wesleyan University

1998

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Full-Text Articles in Macroeconomics

Crowding Out And Government Spending, Marie Carrasco Jan 1998

Crowding Out And Government Spending, Marie Carrasco

University Avenue Undergraduate Journal of Economics

The purpose of this paper is to provide a better understanding of the relationship between budget deficits and private investment and to contribute to the discussion of whether or not such a relationship exists. We test the robustness of Cebula's (1985) model by extending the time period, by testing the model using a proxy for one of the variables, and by de-trending the variables.