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№ 3/2018

№ 3/2018

Fìnansi Ukr. 2018 (3): 43–66
https://doi.org/10.33763/finukr2018.03.043

PUBLIC FINANCE MANAGEMENT

BOHDAN Ivan 1, KONOVALENKO Dmytro 2, YARA Tetiana 3

1National Bank of Ukraine
OrcID ID : https://orcid.org/0000-0002-1752-0198
2SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0001-6314-3525
3SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0002-8242-1479


Economic mathematical models for the diagnostics of fiscal policy


The article is devoted to the development of methodical approaches to diagnosing fiscal policy based on international recommendations set in the IMF's manual “Financial Programming and Policy”. The article presents a methodical approach to specifying the degree of the procyclicality of fiscal policy on the basis of the indicators of the fiscal balance, a cyclically adjusted fiscal balance, and a fiscal impulse. The authors develop two methodological approaches for estimating an output gap (based on Okun's law and Kalman's multivariate filter). The authors also elaborate practical pillars for calculating the income elasticity of the general government sector relative to GDP and determining the cyclical component of the general government revenue and the overall balance of the general government sector. Based on previous research results, indicators of general government sector in accordance with the IMF’s GFSM 2014 standards are calculated. Computations of the fiscal impulses and an assessment of the procyclicality of Ukraine's fiscal policy are performed for the period 2002-2017. Based on the obtained data, the authors defined the time periods in which Ukraine's fiscal policy had a pro-cyclical or countercyclical effect on the trajectory of economic growth. It is concluded that Ukraine's fiscal policy, contrary to the developed countries, increase at the downturn stage of the economic cycle and decline at the upturn stage. The authors develop and analyze two forecast scenarios for the countercyclical fiscal impulse of Ukraine for the period 2018-2020. It is suggested that in the medium term there is an opportunity to apply moderate fiscal stimulus for the economy without disrupting the overall fiscal balance that would contribute to a gradual reduction in the negative gap between potential and actual GDP.

Keywords:general government sector, output gap, Kalman filter, Okun’s law, GFSM 2014, financial programming, procyclical and countercyclical fiscal policy, cyclically adjusted fiscal balance, fiscal impulse

JEL: Е62, Е69


BOHDAN I. . Economic mathematical models for the diagnostics of fiscal policy / I. . BOHDAN, D. Konovalenko, T. Yara // Фінанси України. - 2018. - № 3. - C. 43-66.

Article original in Ukrainian (pp. 43 - 66) DownloadDownloads :579
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