The National Bank of Ukraine has published the fifth issue of its research journal Visnyk of the National Bank of Ukraine, which offers the following articles:
• The NBU’s balance sheet as an analytical tool reflecting macroeconomic processes
The article by Iryna Kachur, Volodymyr Lepushynskyi, and Robert Zammit entitled “The NBU’s Balance
Sheet: Before, During, and After the Crisis” investigates the NBU’s balance sheet. The authors make simulations on the central bank’s balance sheet for the next five years assuming that the NBU will remain committed to inflation targeting, and interest rates will continue to decline as the economic recovery takes hold. Under such scenario, the absolute size of the NBU balance sheet is expected to increase, but its size as a share of GDP is projected to fall from 41% at the end of 2016 to 35% at the end of 2020 as economic growth recovers. Economic stabilization will lead to a reduction in the e central bank's profits. Falling profits, in turn, will erode the financial strength of a central bank. The article contains conclusions about the future financial position of the NBU and recommendations for its strengthening. The authors emphasize that a strong financial position and clear goals are essential prerequisites for successful monetary policy.
• Economic Impact of the Recent Decrease in Social Security Contributions in Ukraine
The article “Economic Impact of the Recent Decrease in Social Security Contributions in Ukraine” by Philipp Engler, Simon Voigts, Robert Kirchner, and Oleksandra Betliy, based on a DSGE model, studies the impact of a sizable decrease in social security contributions on Ukraine’s GDP under different monetary policy regimes. The study results show that the decrease in the social security contributions rate facilitates to GDP and consumption growth and, in the meantime, reduces the inflation rate. These positive effects are substantial in both the short-term and long-term outlooks. At that, in the short-term perspective, the beneficial effect of the decrease in the payroll tax rate is significantly stronger under inflation targeting than under a fixed exchange rate regime.
• Concentration Level of the Audit Services Market of Ukraine
The article “ Quasi-Competiveness of the Audit Services Market in Ukraine: The Aspect of European Integration” by Inna Makarenko and Oleksiy Plastun tests a hypothesis about the market heterogeneity.
The results of the study corroborate a high concentration level in the regional audit services market. In the author's opinion, the Cabinet of Ministers of Ukraine, the Audit Chamber of Ukraine, National Commission for State Regulation of Financial Services Markets, and the Antimonopoly Committee of Ukraine should take measures to develop a competitive market environment, which should facilitate an increase in the efficiency of auditing in Ukraine, thereby enhancing the credibility of financial reporting by companies, banks and financial intermediaries.
The quarterly research journal Visnyk of the National Bank of Ukraine has been published on the NBU’s website since September 2015. It is available only in electronic format. The Editorial Board encourages researchers and academics to send us original articles for further consideration and publishing in the Visnyk of the National Bank of Ukraine.