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.
economic regulation, physical GDP, monetary GDP, GDP movement indices, GDP deflator, imbalance of physical and monetary GDP, stabilization of prices and markets
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
The problems of stabilizing the exchange rate by method of adjusting of macroeconomic equilibrium are considered. It is noted that the exchange rate is the resulting price variable of the ratio of physical volumes of export and import exchange. The interrelation of natural and cash form of major identity of national accounts and formation of the product (goods) unit price in the commodity market and rate of the currency unit (UAH) on monetary segment of the financial market is revealed. The estimation of the capital movement account and ongoing operations current balance account in Ukraine is made. The growing dynamics of capital account deficit that at almost three times grow the level of current account negative balance is revealed. The model of equilibrium of currency supply and hryvnia demand and currency demand and hryvnia supply is justified. A ratios of currency supply and currency demand that by the level more or less than one point will point on devaluation or revaluation currency (UAH) trends and directions of monetary policy of regulators (NBU and the Government of Ukraine) for stabilizing of its course is proposed to count. Based on the proposed method indices of import/export for adjusting the exchange rate for the paternal capital account are calculated and current account exchange rates are adjusted by years. It is concluded that the exchange rate is the result of the ratio of the volume of import and export of currency from Ukraine and the volume of export and import of currency in Ukraine. Adjusting of the macroeconomic balance and the exchange rate stabilizing is recommended to exercise through intensification of financial and real investment for accelerated rates of production of product volume, its export and import optimization.
money, currency, payments balance, capital movement account, current account, net export
The problems of imbalance of economy of Ukraine regions and methodological approaches to the formation of balance, stabilization and growth are considered. The principles of governance decentralization and regulation of balance of regional economy by local authorities on the basis of market economy are grounded. The main principles of decentralization of economic governance are: firstly, transfer some of management financial and industrial powers from the center to the region; secondly, the region should assume functions of mobilizing of funds for balancing revenues with expenditures; thirdly, making of investments in the economic sphere of the region for optimization of proportions of production, income and consumption. Regional demand for money and regional supply of the natural product as main parameters of balanced economy equation are presented in basis of the model of balance of the economy and functions of major regulators of the region. The dynamics of demand volume for money and supply of the natural product and calculation of real parameters of unbalanced regional economy are estimated on an example of the Lviv region. The information base for the region regulators are key quotient-resulting variables of the model of the region economy Qp = vM and of its dynamic form IQ·ip=iv·IM, where IQ – index of physical product volume, ір – index of product unit price, iv – index of money turnover, IM – index of monetary income volume in the region. Average annual indices of quotient-resulting variables make possible to present the actual condition of the economy of the Lviv region in the form of model: 1,016 IQ · 1,1551ip: 0,966iv · 1,267IM. The model characterizes a high level of imbalance of financial, commodity markets and the economy, which is accompanied with high price increase – 15.5% annually, demand for money – 26.7% due to a very low rate of growth of the physical volume of product in the manufacturing sectors of economy of the region – 1.6%. The annual decrease in money turnover by 3,4% (1,000–0,966) shows a decline in purchasing power of population, creditworthiness of enterprises caused by low-income and profits of enterprises and high inflation level. The growth in circulation of money brings unreal but inflationary revenues and profits. Taking into account the above-mentioned arguments, the dynamics of economy of the Lviv region can be represented by the inequality: IQ
decentralization, regional economy, demand for money, supply of the natural product, balance of the economy, interest rate, money turnover, the rate of accumulation
number of natural products, price of the product, amount of money, convertibility of money, national income, national expenditure, deregulation of the economy, productivity of labor and capital, equilibrium of the economy
In the present publication author proposes modernized type of liberal centralized regulatory system aimed at balancing financial-market regulation of markets and the economy equilibrium.
The publication noted that in the basis of liberal centralized system is introduced the concept of John Maynard Keynes in relation to the establishment of stability and equilibrium of the economy across increasing aggregate demand, i.e. cash income of consumers for enhancing consumption that would cause activization of investment activities and growth in the production of the product to the needs of the consumer. Emphasis was placed on the short term, though when prices are fixed and growth in aggregate demand will not affect on the inflation.
However, the author based on the formalized models of financial and commodity markets shows that at the Ukrainian market and markets of countries with transition economy rates are not stable not only in the long term, but short term. As the author notes, the question is in order to create a regulatory system in which the key factors in the financial and commodity markets were moving synchronously, i.e. increased – fell at the same time, then the resulting indicators remain unchanged.
At the basis of the balance approach to regulating equilibrium of the markets and the economy proposed to apply formal models of financial and commodity markets, especially the static model of commodity market: the product of the number of natural products and the unit price of the product must meet the by multiplying the amount of money and the coefficient of turnover. Money supply reasonably presented as a monetary form of national income, which is allocated on the accumulation (savings) and consumption. The volume of real product and the unit price of the product is considered as a function of the distribution of national income on savings and consumption. Statistical model of commodity market moved in a dynamic volume of interest as the multiplication of the natural product and price and multiplication of indices in money supply and the coefficient of its turnover.
Logically justified two models of regulation of markets:
a) consumer-inflation model which provides for the distribution of national income in favor of the consumer; model argues that consumption growth is possible only by reducing volume of investments accordingly to capital-equipping, productivity and volume of production of real product and only increasing the money supply, which would inevitably lead to price increases;
b) cumulative-deflationary model that takes the focus on the regulation and market economy equilibrium with the volume of consumption on the volume of accumulation which is a source of investment, increasing of production of natural products, reducing of costs and growth of national income and consumption.
Here, of course, is important so that increasing investments implemented in technical means and technologies which actually raise the productivity of capital and labor of employees.
free funds, investments, natural product, national income, the system of regulation, balancing equilibrium, the rate of accumulation, the rate of consumption
Methodology of formation of liberal-centralized financial-market regulatory system is grounded. The ratio of proportions of private and non-private property as the basis of a liberal attraction of investment and labor to manufacture the product and make the profit, and centralized regulation of aggregate demand as a factor in the revival of consumption and enhance of production is revealed. It was found that the liberal-centralized financial-market regulatory system leads as to the relative balance of financial and commodity markets, and to the appearance of liquidity and payments crises.
The problem of creating the system of financial market regulation is set up. The concept of convergence of national and regional interests of the financial and contiguous markets’ entities is proposed. Scientific and theoretical principles, regulators and resulting indicators of regulatory system functioning subject to the operation of regulators «not according to the rule» and «according to the rule» are substantiated. Schematic model of the mechanism of formation of national and regional economy convergent development is presented.
Capital flows and securities capitalization formation of functional-regional levels of stock market are substantiated. Economical bases of mechanism for upgrading capitalization of securities ways of improvement of forecast mass and value of capital in economy of the region are elucidated.
Citations
Zablotskyy, M. B. (2014). Rehulyuvannya rivnovahy rehionalʹnoyi i natsionalʹnoyi ekonomiky za proyavom efektiv produktovo-tsinovoyi dykhotomiyi [Adjustment of the balance of regional and national economy for the manifestation of the effects of product-pricing dichotomy]. Rehional’na ekonomika – Regional Economy, 74(4), 87-94. [in Ukrainian]. {re2017.01.113.003}
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m.zablotskyy@gmail.com
UDC 33.053:338.532.4:330.55(477); JEL C62, D57, E30, O16