UNLEASHING UKRAINE’S ECONOMIC POTENTIAL: MACROECONOMIC MULTIPLIERS FROM A FEEDBACK PERSPECTIVE

The purpose of the research is the empirical analysis andelaboration of the system dynamics approach to define and estimate the key drivers of the future macroeconomic stabilization and economic potential of the Ukrainian economy. The study used thegeneralization, systematization and grouping of data, methods of system analysis and synthesis as well as the system dynamics methods and models. Research results. The analysis of the development of the Ukrainian economy in comparison to the Polish economic situation has been completed. We confirmed the hypothesis that many of the initial economic problems in Ukraine – such as a low aggregate demand and export competitiveness – have been the cause of the exchange rate regime. Elaborated system dynamics models not only allow to analyze the feedback structure of a national economy but can also be used to verify the effectiveness of the different implications for the economic policymaking in Ukraine in the coming years. The results of this paper are mostly exploratory and need further, deeper research before conclusions can be used for policymakers in order to elaborate the economic strategy which leads to improvement of the economic potential of Ukraine in the short and long run. Conclusions. Based on the empirical analysis conducted on the realization of the two types of the system dynamic models with the focus on explaining the interrelationships between domestic consumption, aggregate demand, inflation, export competitiveness, and exchange rate fluctuations, it was shown that although the currency peg has had a positive impacts on Ukraine’s energy imports, many of the other economic problems in Ukraine, such as a low aggregate demand and export competitiveness, have had place. It was also confirmed that the passage to flexible exchange rate regime is one of the important drivers of the economic potential and the competitiveness reinforcing as well as achievement of macroeconomic stabilization, especially in the long run.