Assessing fiscal sustainability in Ukraine: TVP and VAR/VEC approaches / Victor Shevchuk, Roman Kopych // Entrepreneurial Business and Economics Review : EBER [Dokument elektroniczny]. – 2018, Vol. 6, ... więcej

Assessing fiscal sustainability in Ukraine: TVP and VAR/VEC approaches / Victor Shevchuk, Roman Kopych // Entrepreneurial Business and Economics Review : EBER [Dokument elektroniczny]. – 2018, Vol. 6, No. 3, s. 73-87 : tab., wykr. – Bibliogr. s. 85-87, Abstr. – doi: 10.15678/EBER.2018.060305. – ISSN 2353-883X

Objective : The purpose of this article is to investigate fiscal s ustainability in Ukraine, using quarterly data sample for the period between 20 00 and 2016, in accordance with a recursive algorithm ... więcej

Objective : The purpose of this article is to investigate fiscal s ustainability in Ukraine, using quarterly data sample for the period between 20 00 and 2016, in accordance with a recursive algorithm derived from the law of motion of t he debt-to-GDP ratio developed by Croce and Juan-Ramon (2003). Research Design & Methods : An assessment of fiscal sustainability in Ukraine is provided according to a recursive algorithm derived from the law of motion of the debtto-GDP ratio, developed by Croce and Juan-Ramon (2003). Both time-varying parameters (TVP) and vector error-correction autoregression (V AR/VEC) models are used. Findings: It is found that there is causality running from the budget surplus to the gap between real interest rate and GDP growth rate, howev er it is not sufficient to guarantee a sustainable debt to GDP ratio. Implications & Recommendations: Our findings argue in favour of fiscal policy actions aimed at an increase in the government reve nues, combined with the public sector expenditure cuts, as current policies do not seem to be sufficient to achieve fiscal sustainability. A more detailed stud y is needed in order to identify most efficient approaches for a decrease in the bud get deficit across a detailed ‘menu’ of expenditure and revenues. Any attempts to decrease interest rate and/or stimulate output growth by an expansionary monetary stance are likely to be counterproductive in the presence of substantial public external debt.