ALTERNATIVE MODELS OF GREEK DEFENSE EXPENDITURES

This paper models and estimates Greek defence spending over the 1950-1 989 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-Muel lbauer functional form is then employed and an estimating equation for the expenditure share of defence is derived, This specification is co mpared with the levels equation through a number of non-nested tests i nvolving model transformation.