In this paper, we estimate the effect of defense spending on the U.S. macroeconomy since World War II. First, we construct a new panel dataset of state-level federal defense contracts. Second, we sum observations across states and, using the resulting time series, estimate the aggregate effect...

This paper analyzes the impact of within-state military spending and national military spending on a state's employment. I estimate that, while within-state spending increases that state's employment (i.e., a positive local effect), an increase in national military spending ceteris paribus...

This paper decomposes the causal effect of government defense spending into: (i) a local (or direct) effect, and (ii) a spillover (or indirect) effect. Using state-level defense spending data, we show that a negative cross-state spillover effect explains the existing simultaneous findings of a...