UDC 33.053:338.532.4:330.55(477); JEL C62, D57, E30, O16 Zablotskyy, M. B. (2018). Rehulyuvannya balansu fizychnoho i hroshovoho VVP dlya stabilizatsiyi spozhyvchykh tsin v Ukrayini [Regulation of the balance of physical and monetary GDP for stabilizing of consumer prices in Ukraine]. Rehional'na ekonomika - Regional Economy, 87 (1), 94-101. Retrieved from http://re.gov.ua/doi/re2018.01.094.php. [in Ukrainian]. Sources: 12
Authors
Resume
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.
Keywords:
economic regulation, physical GDP, monetary GDP, GDP movement indices, GDP deflator, imbalance of physical and monetary GDP, stabilization of prices and markets
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The problems of balance of national expenditures and national income are considered. It is emphasized that the gross domestic product (GDP) is the best indicator for modeling of the balance condition of the economy in general. Emphasis is made that GDP is both the volume of production expenditures and the volume of revenue from production in the economy. It is noted that the volume of national expenditures is formed by the population costs on consumer goods and services and companies’ costs on material resources for producing of goods and services. GDP in the real (physical) and nominal (monetary) forms as a key parameter for model of income and expenditure balance is grounded. It is indicated that the two forms of GDP are functioning simultaneously, and the government of Ukraine is the regulator of physical volume, and National Bank of Ukraine is the regulator of the amount of money. The article proves that when the balance of national expenditure and national income rates is achieved, the prices, fares and money turnover are the same. The prevalence of physical GDP above nominal GDP indicates the imbalances and price increase, and the predominance of physical GDP above nominal GDP shows the imbalances and decrease of prices. The estimation of the volume and dynamics of the both forms of GDP in Ukraine is made and their imbalance in time is found: nominal GDP dominates over real GDP. The dynamics in the form of indices of physical and monetary GDP imbalance model in Ukraine is presented: Iq: Ip ? Iv: Im, where Iq is the index of physical GDP, Ip is the index of unit price of physical GDP, Iv is the index of turnover of money GDP, Im is the index of monetary GDP. The left side of the model expresses the dynamic of potential costs formed by asynchronous movement of goods and services volume and the unit price of goods and services, and the right part expresses the dynamics of the actual national income and demand for money. The calculated ratios of indices show inertia, which expresses high rates of annual growth in national spending and demand for money, and therefore the budgets of most of individual households, businesses and government will become insolvent. General conclusions on regulator of monetary and physical products are made. National Bank of Ukraine should reduce the volume of money in circulation and Ukrainian government should reduce employment in the public sector, especially in the governance, and increase investment volume in order to maintain the production growth of GDP physical volume.
balance, investment flows, national expenditures, national income, management
Analysis of scientific approaches to interpretation of investment capacity is conducted. Definition of the term «investment capacity of territorial community» is suggested. Special attention is paid to its specific features – concrete territorial context and dependence on peculiarities of local natural, social, economic and other factors and on the efficiency and adequacy of territorial management bodies’ activity directed at the use of community’s investment capacity. The structure of territorial community’s investment capacity is examined and its major components are outlined: natural conditions and resources, raw materials base, human resources, economic base, financial resources, investment climate and scientific, technological, innovative, institutional, infrastructural and management maintenance. The problems of forming and exploitation of territorial communities’ investment capacity are emphasized. Low management capacity and promotion activity of local governing bodies, absence of efficient incentives for investors and poor quality of local development programs are among them. The scheme of investment capacity management mechanism at the level of territorial community is suggested in order to outline the directions of management influences of local governing bodies on implementation of territorial communities’ investment capacity.
In recent years, the Ukrainian insurance market has been growing in need to assess the value of insurance companies, which is due not only to a change in the management paradigm of the company, but also to objective market processes occurring in the state. The purpose of the study is to substantiate methodological approaches to determining the market value of an insurance company when using a revenue approach with the forecasting of cash flows of the insurer under different options for the development of insurance activities. The income approach determines the value of the company (business) based on the estimation of discounted cash flows generated by it. It is based on the principle of expectation that any asset acquired for the purpose of generating income is worth as much as it will bring in the future in the light of the time factor. In modern economists’ works a large number of methods and models of discounting are presented within the income approach, the article analyzes the problems of their application for the assessment of Ukrainian insurance companies. The author suggests an algorithm for calculating the cost of an insurance company by discounting cash flows taking into account the specifics of the insurance business, with an approach to determining the cost of capital of the insurer, estimating the amount of free cash flow (FCF) of the company. The algorithm is approved in assessing the value of one of the Ukrainian insurance companies. The discount rate is calculated on the basis of the weighted average cost of capital model, using data on the company’s capital structure and the value of its individual components. To predict future cash flows, the following steps have been taken: the choice of the initial data for forecasting, the construction of the regression equation, the forecasting of model parameters, the interval forecast of free cash flows. The lower limit of the forecast interval in each period is taken by the pessimistic value of the cash flow, the upper limit is optimistic, and the point value is moderate. For each of the variants of development, the company’s residual value is also calculated, added to the amount of current cash flow values and the value of the insurer’s liabilities at the valuation date is taken. Thus, an estimate of the insurer’s value is given with an optimistic, pessimistic and moderate forecast of the activity of the insurance company. The income approach allows carrying out variant calculations with regard to development and innovation in companies, using the methodology proposed in this research.
insurance company value, income approach, discounted cash flow method, weighted average cost of capital, forecasting
On the book: Bilyk R. R. Determinants of regional development in terms of economic security of Ukraine: monograph / R. R. Bilyk; Institute of Regional Research n.a. M. I. Dolishniy of NAS of Ukraine. - Lviv, 2016. - 352 p. (Series: "Problems of regional development").
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