Estimating the Fiscal Impulse in Ukraine
Journal Title: Visnyk of the National Bank of Ukraine - Year 2018, Vol 0, Issue 245
Abstract
This paper estimates the fiscal impulse for Ukraine following the methodology of the OECD, which disaggregates budget revenues and expenditures into categories that are driven by economic cycles. To estimate the fiscal impulse the author calculates both long-term and short-term elasticities of various budget items with respect to GDP. This approach allows the author (i) to identify the fiscal policy response to economic crises in Ukraine in 2008–2009 and in 2014, and (ii) to reveal those budget items that remain sensitive to the fluctuations in the business cycle. The fiscal policy response to the 2014 crisis is found to be significantly tighter than the response to the crisis of 2008–2009. In addition, corporate income tax shows the strongest response to economic cycles among budget revenue categories, while VAT has the greatest contribution to the cyclical component of Ukraine’s budget balance.
Authors and Affiliations
Artem Vdovychenko
Keywords
Related Articles
- EP ID EP426855
- DOI 10.26531/vnbu2018.245.03
- Views 130
- Downloads 1
Economic Impact of the Recent Decrease in Social Security Contributions in Ukraine
Social security contributions paid by firms were massively reduced in January 2016. We employ a state-of-the-art DSGE model to assess the effects of this measure on output, private consumption, and other key macroeconomi...
Cashless Society and De-dollarization in Ukraine. What is Missing from Present Discussions?
The National Bank of Ukraine stepped on the track to a cashless economy aiming at reforming the financial system, improvement of the transmission mechanism, and reduction of the underground economy and corruption. A subs...
Applying Foreign Exchange Interventions as an Additional Instrument Under Inflation Targeting: The Case of Ukraine
This study examines applying foreign exchange rate interventions under Inflation Targeting regime in an Emerging Economy. For this purpose, we employ the Quarterly Projection Model of the National Bank of Ukraine and sim...
Applications for DSGE Models in Central Banking: Key Issues Explored During Research Workshop of the National Bank of Ukraine
This paper reviews a research workshop that was held by the National Bank of Ukraine (NBU) in November 2018 on the application of DSGE models in central banking. We summarize the discussion of the advantages and drawback...
Inflation Targeting Experience: Lessons for Ukraine
In the past three decades, many advanced market and emerging market economies have modernized their monetary policy frameworks. We research the experience of these economies for lessons relevant to the monetary policy in...