A Note on "Crowding Out" in the United States

This study examines the existence of crowding out in the United States by determining to what degree the proportion of actual GNP that was devoted to investment was affected by the proportion of GNP devoted to federal government spending. The empirical results in the regression estimation tentatively indicate that private investment in new capital is in fact crowded out by federal government outlays. Nevertheless, the evidence in this regression indicates also that although crowding out does occur, it is incomplete.