Alternative models of Greek defence expenditures

This paper models and estimates Greek defence spending over the 1950-1989 period. It employs the Stone-Geary welfare function and estimates levels of defence expenditures by the Engle-Granger two-step procedure. The Dickey-Fuller test regression for cointegration is specified in terms of the significance of additional augmentations. The Deaton-Muellbauer functional form is then employed and an estimating equation for the expenditure share of defence is derived. This specification is compared with the levels equation through a number of non-nested tests involving model transformation.Greece, Defence spending, Stone-Geary utility function, Deaton-Muellbauer functional form, Cointegration, Non-nested tests,