Key Macroeconomic Indicators Research Articles

Growth formula: economy of Portugal after the “Carnation Revolution”

This article provides an overview of the Portuguese economy in the last quarter of the 20th and early 21st centuries. Assessing several key indicators of economic development within a historical perspective, the author highlights the most important factors that set the dynamics of national socio-economic growth. For more than four decades, since the “Carnation Revolution” (April 25, 1974), the Portuguese Republic has undergone profound changes in the economy and the socio-political sphere. In the country, there are new, as well as modernized traditional industries, a modern structure of production and consumption; GDP has increased six times, exports of goods and services have grown dramatically. In general, Portugal organically blended in the world economic system, took its rightful place in the global division of labor. One should take into account the effects of the global crisis of 2008-2009, when the Portuguese economy found itself in the epicenter of the “perfect storm” (pairing internal and external negative factors) and was pushed back in practically all key macroeconomic indicators. Despite such a system failure, in the second half of the 2010s, Portugal managed to cope with the peak of the crisis, overcame the general effects of the recession and began to show some of the highest rates of economic growth among the states of the euro zone. However, preservation of the positive economic dynamics is currently threatened by external challenges that require timely and effective response. Such challenges of global nature include the COVID-19 pandemic, the economic impact of which appeared to be a real shock for Portugal, as well as for many other countries in the world.

Assessing the Impact of COVID-19 Pandemic on the Regions’ Socio-Economic Development: The Case of Ukraine

Solving the problems of regional development belongs to the category of strategic and most important of each country. The COVID-19 pandemic has become the biggest challenge for the world economic system, causing a significant impact on the reduction of key macroeconomic indicators, changes in business conditions, which has raised the issue of assessing the social and economic development of regions. The paper considers the application of composite index assessment technology for the consequences of COVID-19 on the development indicators of Ukraine's regions. The comparison was conducted according to the data of the first two quarters of 2019 and 2020. For the study, eight indicators were selected, which by content feature were divided into a subset of economic indicators and a subset of social indicators. A partial composite development index was designed for each subset. The principal components method was used to calculate the weights of the components. The results of the analysis showed that the COVID-19 pandemic had a greater impact on economic development: for each region, there is a decrease in the value of the indicator. While for a partial composite index of social development such a decrease is less noticeable. The reflection of the regions in the space of these composite indices showed that their structure remained virtually unchanged. The analysis of the common composite index of regional development, designed by the convolution of partial composite indices indicators, also showed a decrease in its values in 2020. The paper analyses the measures taken by the Government of Ukraine to neutralize the effects of the pandemic.

Methodical approaches to forecasting and early detection of economic cyclicity

The analysis and generalization of theoretical preconditions of formation of the advancing economic indicators which at different times in different countries of the world are used as indicators of change of a phase of an economic cycle is carried out. Based on the analysis of literature sources, it is established that the methodology of economic forecasting of cyclicality in the scientific literature includes two main areas, namely: a) direct forecasting of the dynamics of key macroeconomic indicators based on extrapolation, correlation and regression analysis, expert surveys (consensus forecasts) and surveys of economic entities; b) the use of leading economic indicators, which by their nature can be pro-cyclical, counter-cyclical and acyclical, and in relation to the phase of the economic cycle - ahead, late and synchronous.
 The most common leading indicators are considered, among which the Index of leading economic indicators of the USA, Composite leading index of the Organization for Economic Cooperation and Development (OECD), Indicator of business confidence by types of economic activity, consumer confidence, business climate and economic sentiment in accordance with the Special Data Dissemination Standard of the International Monetary Fund. Since 2006, the National Bank of Ukraine has been conducting a survey on the status and prospects of business activity, and similar quarterly indicators have been developed by the State Statistics Service of Ukraine and implemented since 2013. At the same time, a separate indicator is proposed for forecasting business activity in construction - the indicator of business confidence in construction (IDVB). However, the feasibility of using these indicators has yet to be proven in practice. To increase the accuracy of forecasting changes in the phases of economic cycles, it is proposed to develop separate indicators at the sectoral and regional levels. Theoretical generalization and substantiation of causes, consequences, methods of counteracting economic cyclicality should become the basis for further applied research. This approach is a theoretical basis for the development of tools for countercyclical management of enterprises, sectors of the economy and national economies in conditions of fluctuations in business activity.

Evaluation of the effectiveness of national policies of minimization of consequences COVID-19 pandemics

The object of research is the effectiveness of the implementation of measures within the national policy to minimize the effects of the COVID-19 pandemic in individual countries. One of the most problematic places is the formation of a policy to minimize the consequences of the COVID-19 pandemic, which would take into account the specifics of the national economy, its margin of safety and aimed at achieving the goals of stabilizing negative economic trends. The pandemic has led to forced quarantine restrictions, which have had a negative impact on national economies. The inability to set up full-fledged business processes has led to rising unemployment and social tensions. An analysis of the main directions of the policy of minimizing the consequences of the pandemic of individual countries that made up the analytical sample. The main characteristics of the measures taken to minimize the effects of the pandemic, aimed at stabilizing the situation in the most crisis segments of the economy: financial assistance to small and medium-sized businesses, tax benefits, job creation and unemployment benefits, stabilization of the budget and banking system. The study used a comparative analysis of the effectiveness of the pandemic confrontation through the prism of the adopted policy by analysing the dynamics of key macroeconomic indicators. This methodological approach involves the involvement of a large database, which presents the main macroeconomic indicators of individual countries and the study of the main parameters of national policies. This ensures that links are identified and that the results of the planned activities are compared. In comparison with known similar methods, this approach allows adding to the base of comparison global indices depending on the purpose of the study and to transform its subject. In the applied aspect, the evaluation of the policy of confronting the pandemic will minimize the cost of time and resources to select and justify effective measures to minimize the negative consequences of unforeseen events and forecast economic trends.

УМОВИ ФОРМУВАННЯ ЕФЕКТИВНОЇ ЗАЙНЯТОСТІ

The article presents the idea of ​​developing the concept of effective employment and creating conditions for its implementation. Under modern conditions, theoretical constructs of full and productive employment contradict the requirements of innovation and information society, do not take into account the peculiarities of modern human resources, socialization of social and labor relations, the priority of improving the quality of life. Instead, the concept of effective employment resolves this contradiction, as it covers not only the economic results of employment, but also its social effectiveness. Employment can be considered effective, when ensures the productive use of human resources and, at the same time, leads to a significant increase in the living conditions of workers. The article notes that at the moment the Ukrainian economy has a model of inefficient employment. This is evidenced by underutilization of human potential, lack of effective jobs, the presence and even growth of unemployment, the spread of informal employment, imbalances, structural and regional disparities in the labor market, increasing migratory outflows of the working population. Employment inefficiencies affect the decline in key macroeconomic indicators. The article proves the need to develop a model of effective employment and proposes measures for its practical implementation. Among the factors of building an effective employment system in the article the emphasis is on such measures as the transition to indirect, soft forms of human resource management, stimulating innovative economic development in all its spheres and activities, developing flexible forms of employment, promoting self-employment, active social policy, including, first of all, modernization of relations in the field of compensation policy.

Monetary policy and macro economic indicators: A review of a developing country’s perspectives 2002–2017

The purpose of the study was to examine the effect of monetary policy on key macroeconomic indicators in Ghana. The study used annual time series data from 2002 to 2017, which was sourced from the ...

International monetary spillovers and macroeconomic stability in developing countries

<abstract> <p>This paper analyses the impact of international spillovers on macroeconomic stability in developing countries. Specifically, the study investigates the impact of United States (US) monetary policy spillovers in the form of US inflation and Federal funds interest rate on Uganda and Kenya's inflation rates, interest rates and the exchange rates, key macroeconomic indicators of importance to macroeconomic stability. The focus on international spillovers from the USA is due to the dominant role it plays in determining global economic conditions. The study applies the Generalized Vector Autoregressive (GVAR) approach to quantify spillovers across these economies. The results shows that despite recent efforts towards East African regional integration, international spillovers from global economies like the US are more significant in determining macroeconomic stability in developing countries, underscoring the importance of global policy coordination. Specifically, we find an amplification of return and volatility spillovers after the onset of the Global financial crisis.</p> </abstract>

КІЛЬКІСНІ АСПЕКТИ ПЕРЕБІГУ СУЧАСНОЇ ЕКОНОМІЧНОЇ КРИЗИ В УКРАЇНІ

The article attempts to quantify the main parameters that characterize the economic crisis in Ukraine. Historical and systemic approaches are used as a basis of research methodology. In the course of the research the following methods were used: analysis to determine the comparative dynamics of macroeconomic indicators; Fourier analysis to determine the cyclical nature of the dynamics of macroeconomic indicators, the calculation of the duration and length of cycles; f-statistics to confirm the validity of the performed theoretical approximation of the lines of dynamics; analysis of variance to assess the variability of macroeconomic indicators; synthesis to build a time map of the aggravation of the crisis period of Ukraine’s economy. A comparative analysis of the dynamics of key macroeconomic indicators for the period 2010- 2020 in a quarterly manner. The cyclical nature of such dynamics is determined and formalized, with confirmation of reliability by means of f-statistics at the level of not less than 0.95. Two cycles of dynamics of macroeconomic indicators lasting 4 and 48 quarters were revealed. The beginning (IV quarter of 2010 / I quarter of 2011) and the end (IV quarter of 2023 / I quarter of 2024) of the modern period of economic crisis in Ukraine are determined. The variability of macroeconomic indicators according to their empirical values and deviations from the theoretical approximation of time lines is estimated and it is confirmed that the basis of variability of the analyzed indicators is their random fluctuations around the theoretical approximation of time lines. It was found that the greatest variability is inherent in price indices (consumer and industrial producers). The article further develops the methodological and practical principles of preventing the development of crisis processes in Ukraine by confirming their cyclicality and determining the duration of cycles, which allows to justify the application of countercyclical measures taking into account the specifics of quantitative patterns of crisis processes. The obtained results will contribute to the improvement of state regulation of economic development of Ukraine, taking into account its cyclical nature and duration of the current socioeconomic crisis.

Реформирование саудовской экономики: итоги и перспективы

Received 09.10.2020. The era of oil-based prosperity, which began after the discovery of huge reserves of “black gold” in the Kingdom in 1938 and turned Saudi Arabia from a backward country with an agrarian economy into the most financially and economically powerful Arab state, may end in the foreseeable future. The previous model of development has exhausted itself, the signs of political and socio-economic stagnation have clearly appeared. Barriers to dynamic, balanced and long-term socio-economic development created a threat not only to keep the Kingdom of Saudi Arabia lagging behind the group of developed countries, but to reach the point of no return in this lag and, most likely, increase it. This article focuses on defining the main directions of the positive changes that have begun, identifying problems that have arisen with the achievement of the intended goals. Based on the analysis of the original Saudi materials, the author tried to assess the main trends of change, to determine the trajectories of the key macroeconomic indicators, to reveal the attitude of broad strata of Saudi society in relation to social and economic changes. The forecast part assesses the possible consequences for the socio-economic development of the kingdom of accelerating the process of decarbonization of the world economy, strengthening economic isolationism at the country and regional levels. As for the prospects for Russian economic participation in the implementation of “Vision 2030”, domestic businesses will have to conduct an intense search for their trade and technological niches in the Saudi market. At present, it makes sense, based on an in-depth analysis of Russian capabilities and past failures in the formation of modern Russian-Saudi relations, to propose competitive, well-developed projects–initiatives to the leaders of the KSA, taking into account the programs included in the “Vision 2030”.

СТАТИСТИЧНЕ ПРОГНОЗУВАННЯ ПОКАЗНИКІВ РІВНЯ ЖИТТЯ НАСЕЛЕННЯ В КОНТЕКСТІ СТАЛОГО РОЗВИТКУ

В статті досліджено сутність і значення прогнозування основних показників рівня життя населення для формування стійкого економічного розвитку країни.
 Статистичне прогнозування рівня життя населення є інформаційною базою для визначення цілей та напрямів соціально-економічного розвитку країни, розроблення орієнтовних макроекономічних параметрів та їх обґрунтування, а також прийняття управлінських рішень щодо досягнення бажаного рівня життя населення.
 Вихідною базою для прогнозування рівня життя населення, визначення основних напрямів розвитку країни є запропонована система статистичних показників рівня життя населення України за 2010–2019 рр. Основними з них є такі макроекономічні показники, як: валовий внутрішній продукт в розрахунку на душу населення, індекс інфляції, середня тривалість життя, індекс людського розвитку, тощо.
 Методологічною основою дослідження є широко відомий метод кореляційно-регресійного аналізу. Регресійний аналіз проведено на основі побудованих рівнянь тренду для кожної із досліджуваних залежних змінних величин. Зокрема, статистичною базою для прогнозування рівня життя населення в контексті сталого економічного розвитку стали два ключові макроекономічні індикатори – валовий внутрішній продукт у розрахунку на одного зайнятого та оплата праці найманих працівників у розрахунку на одного зайнятого. Обґрунтовано доцільність статистичного прогнозування цих індикаторів для дослідження перспектив розвитку рівня життя в країні.
 Валовий внутрішній продукт відображає стан економіки в державі і використовується для оцінки результатів виробництва та споживання, темпів економічного зростання, продуктивності праці, а також формує уявлення про загальний матеріальний добробут населення. Рівень заробітної плати як соціально-економічна категорія є основним джерелом доходів зайнятого населення і значною мірою характеризує матеріальний стан членів суспільства.
 Практичні результати прогнозування рівня життя є основою для обґрунтування та прийняття управлінських рішень щодо подальшого соціально-економічного розвитку країни. Визначено довірчі межі, в яких буде знаходитися обсяг валового внутрішнього продукту в розрахунку на одного зайнятого та оплата праці найманих працівників у розрахунку на одного зайнятого в Україні у 2020 р.
 Сьогодні в умовах невизначеності і швидких змін внутрішнього та зовнішнього середовища важливо передбачати можливі варіанти розвитку ключових показників рівня життя населення та вміти упередити настання можливих небажаних наслідків і тенденцій світової пандемії, що мала свій початок у 2020 році.

The Impact of Oil Prices on Economic Activity: The Case of Azerbaijan

The strategic purpose of the economic policy of Azerbaijan is to ensure sustainable growth. The external factors including oil prices in the world market and investments have a significant influence on economic activity in Azerbaijan. The relationship between oil prices and gross domestic product has been scrutinized and the sensitivity of macroeconomic indicators to oil prices has been investigated. The dependence of investment activity, including foreign investments on oil prices has been determined. In the research, econometric models have been constructed in the purpose of studying the impact of oil prices on key macroeconomic indicators from the qualitative and quantitative point of view. At the same time, a comparative analysis of oil reserves of Azerbaijan with other oil countries has been conducted. According to the results, the government should determine new and sustainable growth pillars based on risks emerged from oil price, improve economic policy and accelerate the transition to innovative high-tech models of economic development.

COVID-19: NEW CHALLENGES FOR CENTRAL ASIA

In 2020, Central Asian countries faced new challenges that are bound to have a huge impact on the development of the region. The coronavirus (COVID-19) epidemic has posed the region’s countries with the need to find mechanisms for adapting the economy and social sphere to the new reality. Despite the difficulties, regional states were able to respond quickly enough to the pandemic and tried to minimize the economic and social consequences. Application of quarantine measures and various restrictions, i.e., border closures and the termination of transport links have yielded positive results. These measures have reduced the incidence of sickness and mortality in all countries. At the same time, they encountered a decline in key macroeconomic indicators. Inflation rate, tumbling GDP and rising unemployment were observed in all Central Asian states. The pandemic has negatively impacted bilateral and multilateral relations of the Central Asian countries. The level of trade and economic relations was lowered, the volume of transported goods decreased. The countries of Central Asia were forced to structure their foreign policy in a new way, which factors in the complicated economic situation in each of the states. Specifically, one of the new trends is the active use of multilateral and bilateral mechanisms of interaction with nonregional states. Despite the steps taken, the countries of the region managed to stabilize the economic situation for a short time. By the fall of 2020, the epidemiological situation remained problematic in the countries of Central Asia. This forced them to develop new measures to support specific sectors of the economy and preserve social and economic stability. The countries did not rule out the introduction of new restrictions and the development of additional economic support measures for the essential sectors of the economy. The slowdown in economic growth in 2020 and the lack of prerequisites for the improvement of the situation do not allow us to expect changes in the region in 2021. The Central Asian states may face a further drop in production volumes, increased unemployment, decreased domestic demand, and inflation. Economic problems in each of the Central Asian countries will negatively affect the geopolitical situation and serve as an obstacle for multilateral interaction of the Central Asian states. Finally, there is still no clear understanding of the impact of the coronavirus on the economies of Central Asia. There are also no calculations that would show how effective the measures taken in the fight against COVID-19 were, and most importantly, it is unclear what resources may be required if the epidemic continues.

Сучасний стан та тенденції розвитку аграрного сектору України

Annotation. The article analyzes the current state and development trends of the agricultural sector of Ukraine, which has become one of those sectors of the Ukrainian economy that are developing very dynamically in recent years. Thanks to this sphere of the national economy that a significant part of gross added value is created, revenues to the budgets of all levels are formed, foreign exchange revenues from exports grow, and the investment process is actively carried out. The special role of the agricultural sector in the socio-economic life of the country is due to the unique combination of favorable climatic conditions and geostrategic position, the ability of Ukraine to occupy an important place in the international food market. Therefore, the study of the state and development trends of the agricultural sector of Ukraine is relevant. Purpose. The purpose of the article is to research the state and trends of the agricultural sector in the economy of Ukraine. Results. The article identifies the place of the agricultural sector in the country’s economy. The key macroeconomic indicators of the agricultural sector are analyzed. The dynamics of the share of agricultural products in total value added, the share of the rural population in the general structure of the population, the structure of employment of the population of Ukraine by all types of economic activity, as well as the share of the employed population in agriculture. It is determined that one of the urgent problems of the agricultural sector of Ukraine’s economy is to attract investments that are necessary to modernize the industry and ensure its competitiveness. The factors that contribute to attracting investment are identified. The volume of foreign direct investment in the agricultural sector and trends in foreign direct investment in the share capital of the agricultural sector are considered. The main obstacles to intensifying investment processes are highlighted. The financial results of the agricultural sector, the growth trend and the dynamics of profitability of agricultural enterprises are studied. The priority directions of the state regulation of the agrarian sector are offered. Conclusions. Considering the state and development trends of the agricultural sector of Ukraine, we can conclude that the agricultural sector occupies an important place in the economy and plays an important role in the socio-economic life of Ukraine. Taking into account the above areas and sound public policy will contribute to the further development of the agricultural sector of Ukraine. Keywords: agricultural sector; dynamics; development; agriculture; agricultural enterprises; investments; areas for improvement.

Measuring the Value of Data and Their Treatment in Macroeconomic Statistics

The paper studies the role of data as an economic asset in the digital economy. The research is focused on the development of an approach to comprehensive data valuation and their adequate treatment in macroeconomic statistics. The first part of the paper reviews the major publications on the so-called Solow productivity paradox: the impact of digital technologies on the productivity growth slowdown. Considering points of view of various researchers, the author takes an opinion that the existing statistical methodology does not permit comprehensive measuring of the digital economy contribution to the productivity dynamics. At the same time, the author does not support the proposal to include the value of data generated by unpaid household activities in macroeconomic accounting and expand the scope of key macroeconomic indicators such as GDP. In the second and the third parts the methods of data valuation used by companies as assets in production, as well as major discussed proposals on methods for measuring the value of data in macroeconomic statistics, are considered. These two aspects of data valuation are closely related, both informationally and methodologically. The author concludes that an increase in the need for the valuation of data at the micro level will inevitably lead to corresponding changes in the methodology of macroeconomic statistics. The last part of the paper explores more elaborately the issues of data valuation as a non-produced asset. The need for such an approach is caused by the existing gap between the marketed assessment of the contribution of data to production and the existing possibilities for accounting for them at the costs of their production. In the author’s opinion, this is a promising direction, allowing to overcome the indicated gap. In support of this, the article provides examples of experimental calculations based on IFRS reports of four Russian companies involved in the production of digital services. Experimental valuation of non-produced assets using the net present value method shows that the value of the non-produced assets involved in the production of data-driven companies differs from the values recorded in their financial statements. This, in particular, occurs due to the underestimation or overestimation of the value of the data used in production, which, according to the author, constitutes the bulk of the unidentified unproduced assets of digital companies. The author concludes that the development of methods for accounting for the value of data as a non-produced asset used in the production of digital products is one of the priority tasks of developing the methodology of the system of national accounts.

Time-frequency linkages of international housing markets and macroeconomic drivers

PurposeThe studies on international housing markets have not modeled frequency domain and focused only on the time domain. The purpose of the present research is to fill this gap by using the state-of-the-art econometric technique of wavelets to understand how differences in the horizon of analysis across time impact international housing markets’ relationship with some of the key macroeconomic variables. The purpose is to also analyze the direction of causation in the relationships.Design/methodology/approachThe author uses the novel time–frequency analysis of international housing markets’ linkages to the macroeconomic drivers. Unlike conventional approaches that do not distinguish between time and frequency domain, the author uses wavelets to study house prices’ relationship with its drivers in the time–frequency space. The novelty of the approach also allows gaining insights into the debates that deal with the direction of causation between house price changes and macroeconomic variables.FindingsResults show that the relationship between house prices and key macroeconomic indicators varies significantly across countries, time, frequencies and the direction of causation. House prices are most related to interest rates at the higher frequencies (short-run) and per capita income growth at the lower frequencies (long-run). The role of industrial production and income growth has switched over time at lower frequencies, particularly, in Finland, France, Sweden and Japan. The stock market’s nexus with the housing market is significant mainly at high to medium frequencies around the recent financial crisis.Research limitations/implicationsThe present research implies that in contrast to the existing approaches that are limited to the only time domain, the frequency considerations are equally, if not more, important.Practical implicationsResults show that interested researchers and analysts of international housing markets need to account for the both horizon and time under consideration. Because the factors that drive high-frequency movements in housing market are very different from low-frequency movements. Furthermore, these roles vary over time.Social implicationsThe insights from the present study suggest policymakers interested in bringing social change in the housing markets need to account for the time–frequency dynamics found in this study.Originality/valueThe paper is novel on at least two dimensions. First, to the best of the author’s knowledge, this study is the first to propose the use of a time–frequency approach in modeling international housing market dynamics. Second, unlike present studies, it is the first to uncover the direction of causation between house prices and economic variables for each frequency at every point of time.

THE IMPACT OF EXTERNAL PUBLIC DEBT ON THE NATIONAL ECONOMY’S KEY MACROECONOMIC INDICATORS (CASE OF UKRAINE)

The paper empirically explores the impact of external public debt in Ukraine on key macroeconomic indicators such as real GDP growth, real effective exchange rate, and current account balance. The problem of increasing external debt affects not only the problems of balance of payments fluctuations but also economic security and economic growth. We have tested the hypotheses regarding the impact of Ukraine’s external public debt on these indicators in the short and long run. As an empirical tool for hypotheses testing vector autoregression models (VaR models) have been chosen. The results of constructed models show the acceleration of the external public debt growth provokes the GDP growth rate to fall with subsequent macrostabilization. The reaction of the GDP growth rate to the shock of the real effective exchange rate is more noticeable. The shock of real effective exchange rate has led to increase in external public debt with a further dampening to zero.Empirical data from the VaR model confirm that external debt has a negative impact on GDP and essentially behaves similarly to the shock of REER strengthening. Research results confirm the relationship between external public debt, real effective exchange rate, and GDP growth in Ukraine. Based on the models it was analyzed the external public debt and real effective exchange rate shocks influence the real gross domestic product growth rate. The growth of external public debt leads to the GDP growth rate fall by 1% during a year and a half with subsequent stabilization in the future. GDP growth fluctuations are explained mainly by their own fluctuations while external public debt is accounting for 2,5—8% of its fluctuations. Fluctuations in external public debt of 7—10% are explained by current account fluctuations in Ukraine. The described results of the model correspond to the concept of dependent economy.

The economic policy of smaller countries if viewed through the development of the Russian Federation

Subject. The article determines what smaller countries pursue in their economic policy as the uncertainty of the world economy increases. Objectives. I study the economic development of the Russian Federation from perspectives of smaller countries and the efficiency of the common and diverse economic policy of smaller countries, which are closely related with the Russian economy, such as Belarus, Armenia, Georgia, Ukraine and Estonia. Methods. I evaluated how some macroeconomic indicators of countries under study changed over time. To verify the hypothesis, I analyzed documents in public domain, including statistical data on macroeconomic developments of countries, such as the Russian Federation, Belarus, Armenia, Georgia, Ukraine and Estonia. I also applied a systems approach, comparative and statistical methods of research on key macroeconomic indicators. Results. At the current phase of multipolarity and globalization, Russia’s economic development is proved to influence both smaller countries coming along with its development vector, and States that simply have common borders with Russia. Considering the single course of their development and their geopolitical position, smaller countries ensure their sustainable growth. Conclusions and Relevance. Those countries which have chosen the single course of the development and considered their geopolitical position have performed their economic policy in the most successful way.

The impacts of macroeconomic and financial indicators on stock market index: Evidence from Thailand

Market capitalisation and foreign investor transactions of the Thai Stock market have expanded significantly over the past 10 years. This research paper employed the autoregressive distributed lag (ARDL) approach to examine the impacts of key macroeconomic and financial indicators on the stock market of Thailand. We applied two models in this study. The first model is based on macroeconomic indicators such as broad money supply, consumer price index (CPI), manufacturing production index (MPI), exchange rate, and exports. The second model is based on financial and commodity indicators such as volatility index, price-to-earnings ratio, gold price index, and oil price index (OIL). Consistent with theory, the results indicate that the Thai stock market index has a long-run relationship with the selected indicators such as exchange rate, broad money supply, CPI, price-to-earnings ratio, volatility index, and OIL. Therefore, the long-run coefficients estimated in this study could be utilised for managing long-term investments.

QUANTITATIVE EASING AS THE MAIN INSTRUMENT OF UNCONVENTIONAL MONETARY POLICY

After the fall of Lehman Brothers in September 2008, the financial crisis turned into a global crisis and had a negative impact on the real economy. During the crisis, there has been a significant decrease in key macroeconomic indicators, such as GDP, short-term interest rates, unemployment and inflation. The GDP growth rate had taken a negative value in developed countries. Inflation was below 1 percent, and deflation was observed in Japan, which in turn slowed down economic development. Central banks responded to the crisis with a change in interest rates, but this was not enough to calm financial markets and improve the real economy. Most central banks have developed many new monetary policy tools, including communication strategies, credit policies, and large asset purchases. These new measures are often called “unconventional” monetary policies. The purpose of the article is to study quantitative easing as one of the unconventional measures of monetary policy. Methodology. The article uses general scientific and special methods: generalization, systematization, economic and statistical analysis, graphic and comparison methods. This allowed us to study the theoretical foundations of the quantitative easing policy, determine the economic background for these measures application, analyze the development stages and the basic rules of functioning policy. The quantitative easing policies usage was also examined on the examples of the Federal Reserve, the European Central Bank, the Bank of England and the Bank of Japan. Results. The main trends and economic conditions, under which these methods can be used in future, were identified using an analysis of the quantitative easing application background. The policy’s main components analysis provides a clear understanding of the quantitative easing essence. As a result of the unconventional monetary policy usage, there has been a significant expansion of the USA, Japan and the Eurozone central banks' balances, which amounts to more than 10 trillion USD. Due to this process, central banks have become key bondholders. Practical meaning. The given results analysis will determine that kind of unconventional monetary policy effectiveness and the possible consequences of a significant increase in the central banks’ balance sheet assets. Value/originality. In the article, the conditions, under which unconventional monetary policy has been applied, are systematized and the four central banks’ quantitative easing policy is compared.

A Version of a Dynamic Stochastic General Equilibrium Model for an Open Economy

The paper presents a dynamical stochastic general equilibrium (DSGE) model for key indicators of the Russian economy. A special feature of the approach is the Keynesian microeconomic foundation, which takes into account market failures such as imperfect competition, as well as inflexible prices and wages. The second specific feature is the hypothesis of rational expectations. The model consists of a system of 17 equations describing the dynamics of key macroeconomic indicators such as GDP, inflation, interest rates, exchange rate, exports, imports, and consumption relative to its equilibrium trajectories. The model is designed to assess the nature of the reaction of key economic indicators to fluctuations in exogenous factors. Using the constructed model, the effects on key macroeconomic indicators from demand shocks, total factor productivity, and changes in the world’s interest rates are estimated. The results of modeling and calculations can be used by monetary authorities to develop monetary policy.