Regulation of the balance of physical and monetary GDP for stabilizing of consumer prices in Ukraine
Journal Title: Регіональна Економіка - Year 2018, Vol 87, Issue 1
Abstract
The problem of the imbalance of physical and monetary GDP as a reason for price volatility is considered. It is noted that the volume of physical GDP is formed by the volume of involved capital and employed labor, and monetary GDP is formed by volume and price of the unit of physical GDP. The fact that the population and companies are always interested in obtaining as much money and material income as possible and being solvent is proven. It was emphasized that with the balance of physical and monetary GDP, prices for goods and tariffs for services are unchanged. The Government of Ukraine and the NBU are suggested to apply the deflator index as the indicator of the assessment of the imbalance between markets and the economy in general – the ratio of the monetary GDP index to the index of physical GDP, which in case of balance is equal to one; in case of inflation – more than one, in case of deflation – less than one. The index model of the law of economic balance is proposed to be used to identify factor variables that influence the underproduction of physical GDP in Ukraine and the rise in prices. The interaction of the NBU, the Government of Ukraine and companies with the aim of optimizing the monetary, investment proposal for companies for the growth of physical GDP up to the needs of consumption is substantiated. An estimation of the dynamics of the movement of physical and monetary GDP indices in Ukraine is carried out, their asynchronous movement and chronic inflation caused by the lag of production behind the needs of consumption of physical GDP, which causes an increase in demand for money and excessive growth of monetary GDP, are revealed. Conclusions and recommendations to the Government of Ukraine and the NBU on the need to intensify investments in order to increase the volume of production of physical GDP and optimize monetary GDP in order to achieve their balance were made.
Authors and Affiliations
Maryan B. Zablotskyy
Keywords
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