Determinants of fiscal deficit and inflation : the case of Ukraine

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Keywords
Inflation ; Fiscal deficit ; Ukraine ; VAR modelAbstract
Fiscal deficits and inflation are one of the main macroeconomic variables that determine the countries’ status and also that they are crucial for emerging countries, such as Ukraine in explaining what could be done more precisely to avoid wide volatilities in economy and what variables could possibly be their determinants. In this research there is an applied Vector Autoregression (VAR) model, which will help defining how other variables’ shocks can affect and explain the main ones, especially during war actions. Research showed that due to big external shocks, there is a need for a strong and efficient monetary and fiscal policy to deal with these kinds of shocks to maintain economic stability and resilience.