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Monetary policy and recovery of economic growth in Ukraine

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  • Shums'ka S.

Abstract

The article deals with international experience and methods of central banks that contributed to the economic development of their countries. The author provides an analysis of principles and results of the current monetary policy of the National Bank of Ukraine in the context of the opportunities for monetary support of economic recovery. It is shown that the peculiarities of modern monetary policy in Ukraine and in particular the qualitative change in the nature of the hryvnia's emission led to decreased amount of real money in the economy, slower lending, lower confidence and growing inflation expectations. To analyze the stabilization function of monetary policy, the author estimates potential GDP (trend 1993-2014), obtained with Hodrika - Prescott filter by separating the trend and cyclical components. To assess the impact of the changes in the real money supply on real GDP rate, the author carried out model based calculations, which, based on elasticity coefficient, made it possible to obtain estimates of GDP in 2015. The article justifies the necessity of adjustment of the current policy and identifies various guidelines, which, within the implementation of inflation targeting, would not raise the price dynamics but rather support economic growth.

Suggested Citation

  • Shums'ka S., 2015. "Monetary policy and recovery of economic growth in Ukraine," Economy and Forecasting, Valeriy Heyets, issue 3, pages 21-41.
    • Handle: RePEc:eip:journl:y:2015:i:3:p:21-41
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    File URL: http://eip.org.ua/docs/EP_15_3_21_uk.pdf
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    References listed on IDEAS

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    3. Ryu, Hang K. & Slottje, Daniel J., 2017. "Maximum entropy estimation of income distributions from Basmann’s weighted geometric mean measure," Journal of Econometrics, Elsevier, vol. 199(2), pages 221-231.

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