Abstract:
Previous empirical studies on the defense spending-economic growth nexus such as Kollias et al. (2007), Mylonidis
(2008), Dunne and Nikolaidou (2012) analyzed this relationship in the case of the EU15. This study extends the
analysis with the inclusion of more EU members and investigates the long run causal ordering between the two
variables. Findings reported herein are not uniformed across all EU members. It is also found that end of Cold War
has significant negative impact on defense expenditures of former east-European countries.