The Impact of Military Expenditures on the Indebtedness of the Czech Republic and Lithuania

Abstract

While several studies have examined the relationship between military expenditures and economic growth, only few studies have focused on the nexus between these expenditures and indebtedness. The authors have been focused on the analysis of the impact of military expenditures on the indebtedness of the Czech Republic and Lithuania over the period 1999-2022. The aim of the paper is to investigate whether the increase in military expenditures has an impact on the countries' indebtedness. The authors have used nine variables characterizing the economic development to identify the relationship between the trends in military expenditures and economic indebtedness based on the results of the estimated models. The results of the correlation analysis showed the expected effect only in the case of Lithuania. The results of the estimated ARDL model did not show the effect of military expenditures on the countries´ indebtedness.