MACROECONOMIC DETERMINANTS AND INSTITUTIONAL FRAMEWORK OF UKRAINE’S NEW INDUSTRIAL POLICY

Анотація

In the contemporary world, industrial policy serves as an important instrument for the structural transformation of the economy. Under a sharp decline in GDP caused by the armed aggression of the russian federation, the application of modern industrial policy instruments aimed at ensuring stable economic growth in the Ukrainian economy has become particularly relevant. The purpose of this article is to identify and quantitatively substantiate the key macroeconomic determinants of Ukraine’s new industrial policy that can ensure growth in GDP per capita. The study employed a combination of general scientific and specific research methods, including the systems approach, methods of analysis and synthesis, comparison, and economic-mathematical modeling. The article develops an architecture for Ukraine’s new industrial policy that integrates institutional, macro-financial, and production components into a unified causal framework. The proposed model is based on a synthesis of the contributions of domestic and foreign scholars in the field of industrial policy, particularly the Harrod-Domar model, the Cobb-Douglas production function, R. Solow’s growth model, P. Romer’s endogenous growth theory, and D. Rodrik’s concept of state intervention. The article substantiates that the establishment of effective public institutions will lead to an increase in the domestic savings rate, which will subsequently become a source of growth in domestic investment and create the foundation for enhancing total factor productivity and, consequently, increasing GDP per capita. Five priority instruments of industrial policy are identified: institutions, the development of the domestic capital market, investment in R&D and education, and technological development aimed at increasing total factor productivity. The study demonstrates that the current rates of population growth, technological progress, and depreciation are insufficient to ensure an adequate level of capital accumulation and restore the economy to its equilibrium state, thereby indicating its structural degradation. Sustainable economic growth in Ukraine can only be achieved under the cessation of the war, as well as through the development of a scientifically grounded design of a new industrial policy and its practical implementation.

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