MACROECONOMIC STABILITY OF THE COUNTRY: THE NEXUS OF INSTITUTIONAL AND BEHAVIOURAL DIMENSIONS
MACROECONOMIC STABILITY OF THE COUNTRY: THE NEXUS OF INSTITUTIONAL AND BEHAVIOURAL DIMENSIONS

Summary/Abstract: The ongoing globalisation, recessions, andfluctuations in world development require theacceptance of timely government interventions anddecisions to save the country's macroeconomicstability. The literature analysis has confirmed a gapin research on assessing and comparingmacroeconomic stability at different levels ofdevelopment, especially in terms of studies thatconsider the behavioural (culture and trust)dimensions and the quality of institutions. This paperaimed to empirically assess how the achievement ofmacroeconomic stability depends on the quality ofinstitutions, increasing society's trust, and culturaldiversity. This study investigated post-communisteconomies among EU countries and Ukraine (as thecandidate for EU) over 2005-2020. Pearsoncorrelation, OLS and FGLS, robustness test output,GEE, and stochastic frontier model were applied toachieve the paper's aims. The findings confirmed thatcountries with high-quality of institutions had ahigher value of macroeconomic stability. In addition,social trust positively affected the relationshipbetween the quality of institutions andmacroeconomic stability. At the same time, variousnational cultural dimensions had different effects onmacroeconomic stability. The four indicators ofHofstede Insights (power distance, masculinity,uncertainty avoidance, and indulgence) had astatistically significant impact on macroeconomicstability

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