Sustainable development of Ukraine as a combination of social, economic and environmental components: structural econometric model of three-pillar approach

Abstract

The combination of the economic, social and environmental issues of the country-level development in the case of Ukraine requires modernization of the national economic system and permanent deep institutional reforms. These measures should be aimed at forming a diverse, competitive and socially oriented post-industrial economy capable of ensuring sustainable development. To ensure the improvement of the management of Ukraine’s sustainable development strategy, structural (simultaneous) model is proposed, based on three endogenous (namely GDP as economic variable, income per household as social variable and the expenses for the environmental protection as environmental variable) and seven exogenous variables. Such an approach makes it possible to investigate the interdependence between variables. Model parameters estimates were calculated with the two-step least squares method. A forecast of the development of the main indicators characterizing the economic, social and environmental components of development at the country level was also estimated. For Ukraine in 2021, according to the forecast based on the structural model, the economic and environmental components will have positive dynamics and rapid growth, while the social component will develop, but more stably and without rapid growth.