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Oleksandra Moskalenko

Oleksandra M. Moskalenko

Duisenberg fellow

Project title

Fiscal and Monetary Policies in Wartime Ukraine: Was it the Path to a Resilient Economy with International Assistance?

Research question

The research aims to investigate the fiscal and monetary policy responses to war shocks, and short-run and long-run effects on the Ukrainian economy.

Project description

Oleksandra Moskalenko aims to investigate the fiscal and monetary policy responses to war shocks in the Ukrainian economy, addressing a significant gap in scholarly literature regarding Ukraine’s experience in managing economic policies during wartime.

In particular, the study seeks to analyze the effectiveness of fiscal and monetary measures implemented by Ukrainian authorities to mitigate the adverse macroeconomic impacts following Russia’s full-scale invasion in February 2022. Key objectives include assessing whether the fiscal and monetary policies adopted during wartime were truly optimal or merely reactive, as well as investigating the main decisions made by policymakers to support Ukraine’s economy and preserve
macro-financial stability amidst internal and external adversities.

Additionally, Moskalenko will explore the contribution of international financial assistance to Ukraine’s financial stability. Despite differences in economic environments between Ukraine and countries like the EU, UK, and USA, policymakers often seek to emulate established economic policies. The research will examine the resilience demonstrated by the Ukrainian economy, despite significant contractions in GDP and damage to infrastructure and manufacturing sectors following the invasion.

Fiscal and monetary authorities faced numerous challenges, including increased security and defense spending, declining revenues, significant internal and external displacement, labor shortages, population reduction, and inflation. Recent literature suggests that fiscal policy in Ukraine leaned towards loosening, while central bank employed unconventional monetary policies, leading to varied outcomes compared to other economies.

The study will utilise a New Keynesian model to assess the impact of fiscal and monetary interventions on key economic variables. By examining the interactions between monetary and fiscal policies during wartime, the research aims to provide valuable insights for policymakers.

Selected publications