Ivan Bohdan

Estimation of the actual and projected level of the neutral interest rate is a central issue in the application of modern monetary theory in the practical context of monetary policy. Views on the role and key drivers of neutral interest rates have evolved over time in parallel with the development of the theory of capital, money, credit and economic growth. Therefore, the paper is aimed at generalizing methods for assessing the neutral interest rate for open economies with emerging markets and formulating recommendations for improving the existing methodological tools for estimating the neutral rate in Ukraine. To achieve this goal, theoretical sources, advisory and research materials of international organizations, central banks and statistical databases were analyzed. It is established that the key issue of the current discussion about the tools for estimating the level of neutral interest rates in countries with small open economies is the relationship between the effects of external and internal factors. The paper identifies the advantages and disadvantages of the method for estimating the level of the neutral rate on the basis of uncovered interest parity rule used by the National Bank of Ukraine within the semi-structural macroeconomic model. The expediency of methodological tools introducing into the practice of monetary regulation of Ukraine for estimating the neutral rate of Ukraine based on the Laubach-Williams approach has been proved with adaptation to the conditions of an open economy, which will consider сinternal factors of economic development – changes in potential GDP and savings.

In peacetime, the main contribution of monetary policy to macroeconomic stability is to ensure the stability of price dynamics through regulating money supply. During the war, the market principles of the economy and the formation of its prices are violated, monetary transmission mechanisms do not work adequately, the role of the state in ensuring the proper functioning of commodity-money relations increases. Therefore, the purpose of this paper is to generalize approaches to the formulation of monetary policy during the wartime and to substantiate the relevant recommendations for contemporary situation in Ukraine. Theoretical sources, advisory and research materials of international organizations and national macroeconomic regulators, statistical databases were used to achieve the stated aim. The generally accepted principle of modifying monetary policy during the wartime is the use by the central bank of instruments that expand the money supply – purchasing assets on the open market, outright purchase of government bonds on the primary market, special targeted refinancing of credit institutions. The paper suggest the design of the monetary regime of the war period, which provides for the modification of such aspects of the central bank performance as the target of monetary policy, the composition of interest rates on basic operations of the central bank, foreign exchange market regulation and regulation of capital flows, the relationships of the central bank and fiscal authority. It is argued that in the conditions of military economy, the main contribution of monetary policy to macroeconomic stability is achieved through ensuring the stable functioning of the government borrowing market and controlling capital flows.

The new global financial and economic crisis is caused by the spread of the coronavirus epidemic, the reduction in aggregate supply, the escalation of trade wars, and the outflow of capital from emerging markets. This requires national macroeconomic regulatory authorities to take prudent measures to protect national economies from destabilizing externalities. Therefore, the purpose of the article is to justify and develop a priority system of stabilization policy and anti-crisis measures to counter the spread of external shocks in the national economy, stabilize it, and create conditions for its further recovery and sustainable economic growth. To achieve this aim, the existing theoretical sources and research materials of international organizations were systematized, the legislative and regulatory framework in Ukraine was generalized, and statistical methods, a historical method, analysis and generalization were also used. As a result, the channels of impact of external shocks on Ukraine’s economy were identified, and the areas of internal vulnerability of the national economy that could significantly increase the negative effects of externalities were determined. The knowledge gained has become the basis for formulating conceptual directions of crisis management and developing a system of measures to counteract crisis phenomena, which include the monetary policy tools of the National Bank of Ukraine, the structural and fiscal policy of the Government, as well as the banking regulation and capital control policies.