Macroeconomic instability: its causes and consequences for the economy of Ukraine

Abstract:

The article deals with the concepts of appearance and elimination of macroeconomic instability, and the Keynesian approach for overcoming issues in Ukraine’s macroeconomic instability. Based on the Ukraine Statistics Service and World Bank data, Ukraine's economy tendencies have been defined: the country has not reached the pre-crisis economic level.

The article identifies the reasons of negative balance payments and budget deficit: a decrease in production value, negative trade balance, growth of foreign creditor’s debt, currency instability, an increase in budget spending. The dynamics of income and expenditure within Ukraine budget has been analyzed, and also the destructiveness of existing approaches for the main financial documents has been grounded.

Considering Ukraine’s economic and political situation, the main causes of macroeconomic instability are systematized. Government-implemented approaches for overcoming the macroeconomic instability have been suggested. The article introduces an approach for minimizing the negative effects on businesses, based on the timely identification of macroeconomic risks in terms of internal and external management. The possible negative impacts in case the timely decisions are not implemented have been assessed.