Econometric modeling of the external debt of Ukraine
Econometric modeling of the external debt of Ukraine

Summary/Abstract: In this article the gross domestic product and the gross external debt of Ukraine are analyzed. Trends for the gross external debt, the public and publicly guaranteed external debt, the gross domestic product (GDP), the ratio of gross debt to the GDP and the ratio of external debt to the GDP of Ukraine are constructed and considered. Econometric models for linking the gross external debt and the gross domestic product of Ukraine are justified based on the analysis of its dynamics. The causation between the gross domestic product and the gross external debt of Ukraine is investigated. The mutual correlation function for the gross external debt and the GDP is calculated, which gets the highest value for two years. Therefore the model of distributed lag time is constructed with a delay of two years. Also the model with instrumental variables is grounded and constructed. According to the econometric model with instrumental variables, the growth of the gross external debt of Ukraine is confirmed by the new borrowings and the cost of servicing of current debt. It is shown that the gross external debt is growing along with the growth of the GDP. This shows on the one hand, the expenditure of a certain amount of the GDP for repayment and servicing of the external debt and on the other hand, the insufficiently effective use of the GDP for the economy of Ukraine in order to reduce its debt.

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