The Impact of Monetary Policy on Economic Growth in Ukraine

Abstract

This study examines the impact of monetary policy on economic growth in Ukraine between 2006 and 2019. After the stationarity and co-integration tests, a vectorautoregressive model (VAM) was used to estimate the impact of monetary factors on economic growth in Ukraine. The research results show that GDP changes are largely explained by its own earlier dynamics, but in the long-run real GDP quite strongly depends on the money supply, exchange rate against euro, and basic interest rate. At the same time GDP is weakly dependent on the exchange rate against US dollar, CPI and PPI, the volume of loans to business and external debt. The authors explain their findings and compare them with several other empirical studies on the subject concerning some other countries.