Fiscal decentralization and macroeconomic stability: the experience of Ukraine’s economy

  • Released On
    Wednesday, 14 February 2018
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/ppm.16(1).2018.10
  • Article Info
    Volume 16 2018, Issue #1, pp. 105-114
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The main objective of this research is to study the role and impact of fiscal decentralization on the macroeconomic stability of the country. The paper analyzes and systematizes approaches to the definition of ‘macroeconomic stability’ concept. The key factors that impact macroeconomic stability are identified. In the framework of this research, the authors identify fiscal decentralization as one of the factors affecting macroeconomic stability. To determine the strength and statistical significance of the above mentioned relationship, the authors suggest presenting macroeconomic stability as a functional dependency between macroeconomic stability and the level of fiscal decentralization, which is described by the following variables: the growth rate of money supply, investment and openness of the economy, fiscal decentralization. In this case, it is suggested to determine the level of fiscal decentralization in three directions: expenditure decentralization, revenue decentralization and expenditure decentralization simultaneously.

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    • Figure 1. Graphical interpretation of the analysis of macroeconomic stability of Ukraine for the period 2000–2015 (own calculations based on data from)
    • Table 1. Calculation of macroeconomic stability of Ukraine over the period 2000–2015 (our own calculations based on data from)
    • Table 2. Descriptive statistics of the main dependent and explanatory variables of the regression equation (based on our own calculations)
    • Table 3. Augmented Dickey-Fuller test statistics of dependent and explanatory variables of the regression equation (based on our own calculations)
    • Table 4. Results of impact assessment of fiscal decentralization on macroeconomic stability of Ukraine for the period 2000–2015 (based on our own calculations)