FORECASTING: THE ESSENCE AND SIGNIFICANCE OF MONETARY POLICY IMPLEMENTATION

Author
, Doctor of Economic Sciences, Associate Professor, Professor of the Department of Banking Business and Financial Services, Ukraine, Kharkiv, ploshchad' Svobody, 4
, Doctor of Economic Sciences, Associate Professor, Professor of the Department of Finances, Banking, and Insurance, Ukraine, Kharkiv, ploshchad' Svobody, 4

In heading

 Economic theory;

Signed print

 23.11.2021

Issues number

 2021-№4 (47)

Page

 25-52

Type of articles

 Scientific article

Code UDK

 338.23:336.74

ISSN print

 2411-5584

Abstract

 The authors have demonstrated the importance of anticipating monetary policy implementation. The authors have determined that managing economic entities’expectations through developing appropriate forecasts enables financial market participants: to evaluate the regulator’s vision of the content of monetary policy aimed at bringing the inflation to an established goal; to make informed investment decisions; and to improve the effectiveness of the key rate’s impact on market interest rates, the cost of financial resources, and the inflation. Forecasts are noted for their erratic nature. The article describes phases of the forecast execution and monetary policy decision-making. The authors have demonstrated the relevance of the assumptions, the quality of the original data, and the expert judgment throughout the forecasting process. Forecasting hubs have been discovered in Ukraine. The article discloses the relationship between the National Bank’s aims and the principles of the National Bank’s monetary policy. The authors have made corresponding recommendations to improve macroeconomic forecasting.

Keywords

 monetary policy , regulatory activity, forecasting, analysis, expectations, efficiency, methodology, modelling tools.

Reviewer

External reviewer

Article in PDF

 25-52

Bibliography

 1. Andriushchenkov, A. (2018). Prohnozuvannia dlia tsilei monetarnoi polityky [Forecasting for monetary policy]. Retrieved from https://bank.gov.ua/admin_uploads/article/Forecasting_%D0%90 %D0%BD%D0%B4%D1%80%D1%8E%D1%89%D0%B5%D0%BD%D0%BA%D0%BE%D0%B2_pr_2020‑10‑23.pdf?v=4 [in Ukrainian].
2. Z herdetska, L. V., & Postyrnak, I. S. (2016). Rozvytok modelei prohnozuvannia bankrutstva bankiv [Development of models for forecasting bank failures. Global and national economic problems]. Hlobalni ta natsionalni problemy ekonomiky – Global and national economic problems, 14, 796–801 [in Ukrainian].
3. Barr, R. S., & Siems, T. F. (1996). Bank Failure Prediction Using DEA to Measure Management Quality. Retrieved from https://s2.smu.edu/~barr/pubs/bankfail1.pdf.
4. Kaciak, E. (2000). Predicting bank failures in a newly emerging free-market. Perspective, 3 (19), 105–117.
5. Kaminsky, G., Lizondo, S., & Reinhart, C. (1998). Leading indicators of currency crises. IMF Staff Paper, 45, 1. Retrieved from https://www.imf.org/external/pubs/ft/staffp/1998/03-98/pdf/kaminsky.pdf.
6. Ostrovska, H., & Kvasovskyi, O. (2011). Analiz praktyky vykorystannia zarubizhnykh metodyk (modelei) prohnozuvannia ymovirnosti bankrutstva pidpryiemstv [Analysis of the practice of using foreign methods (models) for predicting the probability of bankruptcy]. Halytskyi ekonomichnyi visnyk – Galician Economic Bulletin, 2 (31), 99–111 [in Ukrainian].
7. Savchenko, V. F. (2011). Planuvannia i prohnozuvannia: evoliutsiini zminy ta sytuatsiia v Ukraini [Planning and forecasting: evolutionary changes and the situation in Ukraine]. Chernihivskyi naukovyi chasopys Chernihivskoho derzhavnoho instytutu ekonomiky i upravlinnia. Seriia 1: Ekonomika i upravlinnia – Chernihiv: Chernihiv Scientific Journal of the Chernihiv State Institute of Economics and Management. Series 1: Economics and management, 2, 12 [in Ukrainian].
8. Stelmakh, V. S. (2009). Monetarna polityka Natsionalnoho banku Ukrainy: suchasnyi stan ta perspektyvy zmin [Monetary policy of the National Bank of Ukraine: current status and prospects for change]. Kyiv: Tsentr naukovykh doslidzhen Natsionalnoho banku Ukrainy [in Ukrainian].
9. Cherep, A. V., & Komisarenko, O. A. (2013). Rozrobka modeli prohnozuvannia bankrutstva komertsiinykh bankiv Ukrainy na osnovi zarubizhnoho dosvidu [Development of a model for predicting the bankruptcy of commercial banks in Ukraine based on foreign experience]. Finansovo-kredytna diialnist: problemy teorii ta praktyky – Financial and credit activities: problems of theory and practice, 1, 18–23 [in Ukrainian].
10. Jürgen, V. H., & Tai-Kuang, Ho. (2007). Money Market Pressure and the Determinants of Banking Crises. Journal of Money, Credit and Banking, Blackwell Publishing, 39 (5), 1037.
11. Yurchyshyn, V. (2019). Posylennia znachymosti monetarnoi polityky v krainakh. Tsentralnoi i Skhidnoi Yevropy u postkryzovyi period i rekomendatsii dlia Ukrainy [Strengthening the importance of monetary policy in Central and Eastern Europe in the post-crisis period and recommendations for Ukraine]. Kyiv: Zapovit. Retrieved from http://razumkov.org.ua/uploads/article/2019_Monetary_Stimuls_in_CEE_For_Ukraine.pdf [in Ukrainian].
12. Pohorelenko, N., & Nikolayeva, V. (2020). Rol prohnozuvannia oblikovoi stavky v systemi keruvannia ochikuvanniamy [The role of forecasting the discount rate in the management system of expectations]. Naukovo-praktychnyi zhurnal «Ekonomichni studii» – Scientific and practical journal «Economic Studies», 1 (27), 151–156 [in Ukrainian].
13. Hlushchenko, O. V. (2016). Kanal protsentnykh stavok monetarnoho transmisiinoho mekhanizmu yak skladova chastyna finansovoi arkhitektoniky Ukrainy [The channel of interest rates of the monetary transmission mechanism as an integral part of the financial architecture of Ukraine]. Współpraca Europejska. Warsaw – European cooperation. Warsaw, 10 (17), 77–91 [in Ukrainian].
14. Hlushchenko, O. V. (2015). Otsinka suchasnoho stanu kanalu ochikuvan monetarnoho transmisiinoho mekhanizmu Ukrainy [Assessment of the current state of the channel of expectations of the monetary transmission mechanism of Ukraine]. Finansovokredytna diialnist: problemy teorii ta praktyky – Financial and credit activities: problems of theory and practice, 2 (19), 195–205 [in Ukrainian].
15. National Bank of Ukraine. (2018). Stratehiia monetarnoi polityky Natsionalnoho banku Ukrainy, zatverdzhena Rishenniam Rady Natsionalnoho banku Ukrainy № 37‑rd vid 13.07.2018 roku [Monetary policy strategy of the National Bank of Ukraine, approved by the Decision of the Board of the National Bank of Ukraine dated July 13, 2018]. Retrieved from https://zakon.rada.gov.ua/laws/show/vr037500-18?lang=uk [in Ukrainian].
16. National Bank of Ukraine. (2021). Osnovni zasady hroshovo-kredytnoi polityky na 2022 rik ta serednostrokovu perspektyvu, skhvaleni rishenniam Rady Natsionalnoho banku Ukrainy vid 13 veresnia 2021 roku [Basic principles of monetary policy for 2022 and the medium-term perspective, approved by the decision of the Board of the National Bank of Ukraine dated September 13, 2021]. Retrieved from https://bank.gov.ua/admin_uploads/article/MPG_2022‑mt.pdf?v=4 [in Ukrainian].
17. Bukovynskyi, S. A., Unkovska, T. Ie., & Dzhus, M. O. (2015). Do pytannia rozrobky monetarnoi stratehii podolannia stahfliatsiinoi kryzy [On the development of a monetary strategy to overcome the stagflation crisis]. Ekonomika Ukrainy – Economy of Ukraine, 8, 4–30 [in Ukrainian].
18. Shcherbak, A. (2008). Yak pryborkaty infliatsiiu v Ukraini? [How to curb inflation in Ukraine?]. Ekonomist – Economist, 9, 43–45 [in Ukrainian].
19. Koziuk, V. (2019). Chomu prohnozy NBU ta uriadu ne zbihaiutsia [Why the forecasts of the NBU and the government do not match]. Novoe vremya. Biznes – New time. Business. Retrieved from https://biz.nv.ua/ukr/experts/prognozi-nbu-i-kabminu-chomuvoni-ne-chasto-ne-zbigayutsya-50033840.htmlhttps://biz.nv.ua/ukr/experts/prognozinbu-i-kabminu-chomu-voni-ne-chasto-ne-zbigayutsya-50033840.html [in Ukrainian].
20. Kovalenko, O. (2009). Infliatsiia v Ukraini: osoblyvosti vplyvu na finansovu systemu [Inflation in Ukraine: features of the impact on the financial system]. Formuvannia rynkovoi ekonomiky v Ukraini – Formation of a market economy in Ukraine, 19, 308–315 [in Ukrainian].
21. Pro metody ta formy prohnozuvannia makroekonomichnykh pokaznykiv ekonomichnoho i sotsialnoho rozvytku Ukrainy, a takozh monetarnoi polityky: rishennia rady NBU № 1‑rd vid 29.01.2019 roku. (2019). [On methods and forms of forecasting macroeconomic indicators of economic and social development of Ukraine, as well as monetary policy: the decision of the NBU Council dated January 29, 2019]. Retrieved from https://zakon.rada.gov.ua/laws/show/vr001500-19#Text [in Ukrainian].
22. Korablin, S. (2015). Monetarnaya politika: problema celevyh orientirov [Monetary
policy: the problem of targets]. Zerkalo nedeli – Mirror of the week, 7. Retrieved from
http://gazeta.zn.ua/macrolevel/monetarnaya-politika-problema-celevyh-orientirov.html
[in Ukrainian].
23. Somyk, A. V. (2014). Pravyla ta tendentsii realizatsii suchasnoi protsentnoi polityky tsentralnykh bankiv [Rules and trends in the implementation of modern interest rate policy of central banks]. Efektyvna ekonomika – Efficient economy, 10. Retrieved from http://www.economy.nayka.com.ua/?op=1&z=3415 [in Ukrainian].
24. Bobrovska, O. Yu. (2011). Evoliutsiia prohnozuvannia rozvytku sotsialnoekonomichnykh protsesiv: stan i napriamky udoskonalennia [Evolution of forecasting the development of socio-economic processes: the state and directions of improvement]. Zbirnyk naukovykh prats «Publichne administruvannia: teoriia ta praktyka» –Collection of scientific papers «Public administration: theory and practice», 2 (6). Retrieved from http://www.dbuapa.dp.ua/zbirnik/2011–02(6)/11boysnu.pdf [in Ukrainian].
25. Koreeva, E. B. (2011). Metody socialno-ekonomicheskogo prognozirovaniya [Methods of socio-economic forecasting]. Samara: Izd-vo Samar. gos. aerokosm. un-ta [in Russian].
26. Fursin, O. O. (2009). Metodolohiia doslidzhennia sotsialno-oriientovanoho upravlinnia v konteksti ekonomichnoho prohnozuvannia [Methodology of research of sociallyoriented management in the context of economic forecasting]. Zbirnyk naukovykh prats «Humanitarnyi visnyk Zaporizkoi derzhavnoi inzhenernoi akademii» – Collection of scientific papers «Humanitarian Bulletin of the Zaporozhye State Engineering Academy», 38, 94–105 [in Ukrainian].
27. Pro derzhavne prohnozuvannia ta rozroblennia prohram ekonomichnoho i sotsialnoho rozvytku Ukrainy: Zakon Ukrainy vid 23.03.2000 r. № 1602‑III. (2000). [On state forecasting and development of programs of economic and social development of Ukraine. Law of Ukraine dated March 23, 2000]. Retrieved from https://zakon.rada.gov.ua/laws/show/1602–14#Text [in Ukrainian].
28. Memorandum mizh Kabinetom ministriv Ukrainy ta Natsionalnym bankom Ukrainy pro vzaiemodiiu z metoiu dosiahnennia stiikoho ekonomichnoho zrostannia ta tsinovoi stabilnosti vid 3 zhovtnia 2019 roku. (2019). [Memorandum between the Cabinet of Ministers of Ukraine and the National Bank of Ukraine on cooperation to achieve sustainable economic growth and price stability dated October 3, 2019]. Retrieved from https://www.kmu.gov.ua/news/uryad-ta-nbu-pidpisali-memorandum-provzayemodiyu-dlya-dosyagnennya-stijkogo-ekonomichnogo-zrostannya-ta-cinovoyistabilnosti [in Ukrainian].
29. Prohnoz ekonomichnoho i sotsialnoho rozvytku Ukrainy na 2021–2023 roky, skhvalenyi postanovoiu Kabinetu Ministriv Ukrainy № 671 vid 29.07.2020 roku. (2020). [Forecast of economic and social development of Ukraine for 2021–2023, approved by the resolution of the Cabinet of Ministers of Ukraine dated July 29, 2020]. Retrieved from https://zakon.rada.gov.ua/laws/show/671–2020-%D0 %BF [in Ukrainian]
30. Inflation report. (n.d.). [An inflation report]. Retrieved October 18, 2021, from https:// bank.gov.ua/ua/monetary/report [in Ukrainian].
31. National Bank of Ukraine. (2019). Pro metody ta formy prohnozuvannia makroekonomichnykh pokaznykiv ekonomichnoho i sotsialnoho rozvytku Ukrainy, a takozh monetarnoi polityky: rishennia rady NBU № 1‑rd vid 29.01.2019 [On methods and forms of forecasting macroeconomic indicators of economic and social development of Ukraine, as well as monetary policy: the decision of the NBU Council dated January 29, 2019]. Retrieved from http://search.ligazakon.ua/l_doc2.nsf/link1/PB19064.html [in Ukrainian].
32. Petryk, O., & Nikolaychuk, S. (2007). Vyznachennia optymalnoho rivnia infliatsii dlia Ukrainy [Determining the optimal level of inflation for Ukraine]. Visnyk Natsionalnoho banku Ukrainy – Bulletin of the National Bank of Ukraine, 6, 10–23 [in Ukrainian].
33. Solohub, D. (2019). Mozhlyvosti dlia podalshoho pomiakshennia monetarnoi polityky ochevydni [Determining the optimal level of inflation for Ukraine]. Tyzhden.ua – Week.ua. Retrieved from https://m.tyzh den.ua/Economics/239584.html [in Ukrainian].
34. Kryvenko, L. V. (2010). Hroshovo-kredytni zasoby rehuliuvannia ekonomiky [Monetary regulation of economics]. Sumy: DVNZ «UABS NBU» [in Ukrainian].
35. Shcherbina, V. V. (2017). Model pidvyshchennia efektyvnosti makroekonomichnoho prohnozuvannia ta planuvannia dokhodiv Derzhavnoho biudzhetu Ukrainy [Model of improving the efficiency of macroeconomic forecasting and revenue planning of the State Budget of Ukraine]. Akademichnyi ohliad – Academic review, 1 (46), 44 [in Ukrainian].
36. Pestsova-Svitalka, O. S. (2013). Ahrehovani pokaznyky sotsialnoho ta ekonomichnoho rozvytku krainy na makrorivni [Aggregate indicators of social and economic development of the country at the macro level]. Sotsialno-ekonomichnyi rozvytok Ukrainy v umovakh transformatsiinykh zmin: vyklyky, tendentsii perspektyvy – Socioeconomic development of Ukraine in the conditions of transformational changes: challenges, tendencies of perspective, 91 [in Ukrainian].
37. Monetary policy of the NBU in 2021: the deviation of inflation from the target and the purchase of IGLBs. (2021). [NBU Monetary Policy in 2021: About the rejection of inflation from the target and purchase of T-bills]. Retrieved from http://finbalance.com.ua/news/monetarna-politika-nbu-v-2021‑rotsi-pro-kupivlyu-ovdp-ta-vidkhilennyainflyatsi-vid-tsili [in Ukrainian].
38. Honcharenko, V. (2012). Modeliuvannia resursnoho zabezpechennia pry makroekonomichnomu prohnozuvanni [Modeling of resource provision in macroeconomic forecasting]. Ekonomichnyi analiz – Economic analysis, 10 (1), 108–111 [in Ukrainian].
39. Q&A: discount rate forecast. (n.d.). [Q&A: Prognosis of the discount rate]. Retrieved October 18, 2021, from https://bank.gov.ua/ua/news/all/qa-prognoz-oblikovoyi-stavki [in Ukrainian].

Code DOI

 10.31359/2411-5584-2021-47-4-25

21.01.2022