Do Economic Determinants Affect the Size of Military Spending?

Abstract

The article aims to identify the dependence of military expenditures and selected economic determinants on the example of the V4 countries in the years 1999-2020. The following are selected as economic determinants: the size of the gross domestic product, the rate of inflation, the debt and deficit of the government sector and unemployment. Correlation analysis proved the expected relationship between the gross domestic product and the military expenditure of Hungary and especially Poland. The relationship between military spending and unemployment was confirmed for Poland, Hungary and Slovakia, the expected relationship between military spending and government debt for the Czech Republic. The linear regression model confirmed the positive effect of the gross domestic product on military expenditure in the case of Poland, the effect of the increase in military expenditure due to rising inflation in Hungary and the negative effect of increasing state indebtedness in the case of the Czech Republic. At the same time, the results did not confirm the uniformity of the factors affecting the size of the military factors in the analyzed V4 countries.

Keywords

• military expenditure
• gross domestic product (gdp)
• harmonized index of consumer prices (hicp)
• general government debt
• unemployment