Assessing macroeconomic effects of monetary policy in Ukraine

The paper highlights the important problem of the impact of monetary policy on macroeconomic indicators in Ukraine and analyzes the global experience of the implementation of monetary policy to achieve stable projections of economic growth. The authors review the basic opinions of researchers studying monetary policy and its impact on the equilibrium between income and balance of payments. A comparative analysis was made for the growth rates of money supply and monetization for industrial countries and transitional economies. The authors carry out an empirical estimation to assess the dependence of industrial production, total exports and technological exports on monetary factor and exchange rate using two-stage least squares model (2SLS) and vector autoregression with error correction (VECM). The main research findings include: devaluation of the hryvnia does not serve as a factor of exports stimulation, which largely depends on energy imports; currency devaluation restricts the exports of industrial production. The increase in monetization level of the economy in the short-term period improves the dynamics of industrial output, but, in the long term period, the effect is opposite. Depreciation of national currency negatively impacts the technological exports. On the whole, the authors identify a restrictive impact of the expansion of monetary policy on industrial output, primary exports and technological exports.