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

TLDR: Melnyk et al. as mentioned in this paper studied the role and impact of fiscal decentralization on macroeconomic stability of the country and identified the key factors that impact macro economic stability, which is described by the following variables: the growth rate of money supply, investment and openness of the economy.

Abstract: 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. Leonid Melnyk (Ukraine), Lina Sineviciene (Lithuania), Oleksii Lyulyov (Ukraine), Tetyana Pimonenko (Ukraine), Iryna Dehtyarova (Ukraine) BUSINESS PERSPECTIVES LLC “СPС “Business Perspectives” Hryhorii Skovoroda lane, 10, Sumy, 40022, Ukraine www.businessperspectives.org FISCAL DECENTRALIZATION AND MACROECONOMIC STABILITY: THE EXPERIENCE OF UKRAINE’S ECONOMY Received on: 11th of October, 2017 Accepted on: 26th of November, 2017