Abstract
This paper employs an applied general equilibrium model to simulate the long-run effects of reductions in U.S. defense expenditures. In the long-run these reductions significantly affect only the output of the defense and government industries, and do not significantly affect the distribution of income or the relative price of capital and labor. The structure of the tax or expenditure changes which accompany defense reductions may cause large allocative and distributional effects. Thus, the fiscal decisions which accompany defense expenditure reductions are the key to determining their impact.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
