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Influence of the Level of Economy Monetization and the Structure of Money Supply on Lending to the Enterprises of the Agricultural Sector

Author

Listed:
  • Yurii Lupenko

    ("Institute of Agrarian Economics" National Scientific Centre, Kyiv, Ukraine)

  • Svitlana Andros

    ("Institute of Agrarian Economics" National Scientific Centre, Kyiv, Ukraine)

Abstract

In Ukraine, the key condition for solving the problem of a non-inflationary increase in the level of economy monetization is the development of financial intermediaries capable of redistributing cash flows to investments. The purpose of the article is to develop a methodology for studying the influence of the level of economy monetization and the structure of the money supply on the lending activity of banks and, on this basis, to develop recommendations for the financial support of the agricultural sector of the economy. The article examines the following indicators of the structure and quality of the money supply in the economy: the level of economy monetization, the share of various aggregates in the money supply, the money multiplier and factors affecting them. The authors' attention is focused on the need for scientific substantiation of the economy's need for money and the management of the structure of the money supply to achieve the goals of state monetary policy. The role of state monetary policy in creating conditions for the resumption of growth in the agricultural sector was revealed. The analysis of macroeconomic indicators was carried out and the assessment of the impact of key factors on the state of the agricultural sector and the economy as a whole was carried out. The assessment of the level of monetization of the Ukrainian economy was carried out. The reasons for the low level of monetization of the Ukrainian economy were revealed and the ways to overcome it were formulated. Based on a critical analysis of various positions, it is shown what a balanced monetary policy should be in Ukraine. It has been proved that a significant decrease in the discount rate and an excessive increase in the money supply lead to an increase in inflation, an increase in risks in the financial sector and a destabilization of the situation in the agricultural sector, as well as in the economy as a whole. The relationship between the emission mechanism and the policy of stimulating the growth of the agricultural sector has been determined. The role of the main institutional elements of state monetary policy in enhancing the progressive development of the Ukrainian economy was revealed. Recommendations for improving the state regulation of the monetary sphere were given.

Suggested Citation

  • Yurii Lupenko & Svitlana Andros, 2021. "Influence of the Level of Economy Monetization and the Structure of Money Supply on Lending to the Enterprises of the Agricultural Sector," Oblik i finansi, Institute of Accounting and Finance, issue 3, pages 55-62, September.
    • Handle: RePEc:iaf:journl:y:2021:i:3:p:55-62
    DOI: 10.33146/2307-9878-2021-3(93)-55-62
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    agricultural sector of the economy; level of the economy monetization; structure of money supply; aggregates; multiplier;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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