Теоретичні та прикладні
питання економіки. Збірник наукових праць. Випуск 1/2 (40/41)
УДК 330.354:
339.5.053.7: 330.43
JEL C52, E23, F14, F17, F43
DOI https://doi.org/10.17721/tppe.2020.40.2
Olena Bazhenova,
D.Sc. (Economics), As.Professor
Taras Shevchenko National University of Kyiv,
ORCID: http://orcid.org/0000-0003-3197-8426
Ihor Chornodid,
D.Sc. (Economics), Head of Department
Academy of Labor, Social Relations and Tourism
ORCID:
http://orcid.org/0000-0002-4464-2641
TERMS OF TRADE AND INDUSTRIALIZATION: REALITIES IN
UKRAINE
The paper explores the impact of terms of trade on the industrialization
and economic growth in Ukraine due to significant vulnerability of national
economy to foreign economic shocks, its openness and mainly commodity structure
of exports. In this research we have chosen manufacturing value added as
percent in GDP to identify periods of industrialization, as its growth
corresponds to periods of accelerated industrial development and vice versa. Also we considered GDP per capita as indicator of national
economy’s performance. The changes in terms of trade were investigated based on
the analysis of terms of trade adjustments, which are determined by the ability
to import goods and services minus exports at constant prices. As an empirical
research tool vector autoregressive models have been chosen to explore the
relationship between endogenous and exogenous variables in dynamics. Thus, the
endogenous variables in the model are the annual growth rate of GDP per capita,
manufacturing value added and terms of trade adjustments in 1991-2018. Therefore,
the first-order vector autoregression model was constructed to examine this
relationship. According to the results of research, acceleration of terms of
trade adjustments growth rate (deterioration of terms of trade) in Ukraine
leads to fluctuations in the manufacturing value added growth with an increase
of almost 3% in the second period and further declining. It indicates an increase in industrial production in response to the
deterioration of terms of trade in the short run and possible intensification
of innovative economic growth triggers. Fluctuations in manufacturing value added account
for from almost 7% to 14% in fluctuations of GDP per capita growth. In turn, fluctuations
in terms of trade adjustments account for only from 3% to almost 5%. At the
same time, fluctuations in manufacturing value added from 8% to 13% are
explained by fluctuations in terms of trade adjustments.
Keywords: terms of trade, industrialization, economic growth, vector
autoregression model, national economy, innovations
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